If the CPI for a country is 100 in the year 2007, and 120 in the year 2008, then the inflation rate for that country for the one-year period 2007-2008 is
A) 2 percent
B) 20 percent
C) 100 percent
D) 200 percent

Question

Quizplus · Accepted Answer

The inflation rate is calculated as the percentage change in the CPI from one year to the next. The formula is [(CPI in the later year - CPI in the earlier year) / CPI in the earlier year] * 100. Using the given CPI values, the calculation is [(120 - 100) / 100] * 100 = 20%.

If the CPI for a Country Is 100 in the Year