Suppose that the consumer price index at year-end 2010 was 180 and by year-end 2011 had risen to 189. What was the inflation rate during 2011?
A) 4.8 percent
B) 5 percent
C) 6 percent
D) 9 percent

Question

Quizplus · Accepted Answer

To calculate the inflation rate, we use the formula:

inflation rate = (CPI at year-end 2011 - CPI at year-end 2010) / CPI at year-end 2010 x 100%

Substituting the given values, we get:

inflation rate = (189 - 180) / 180 x 100% = 5%

Therefore, the inflation rate during 2011 was 5 percent, which is option B.

Suppose That the Consumer Price Index at Year-End 2010 Was