If the CPI was 100 in the base year and 96 in the following year,what was the inflation rate?
A)-4 percent
B)4 percent
C)96 percent
D)100 percent

Question

Quizplus · Accepted Answer

The inflation rate formula is ((current year CPI - last year CPI) / last year CPI) x 100. Thus, ((96-100)/100) x 100 = -4%. As the CPI decreased from 100 to 96, the inflation rate is negative, indicating deflation, meaning prices have decreased in the current year compared to the base year. Therefore, the correct answer is (A)-4 percent.

If the CPI Was 100 in the Base Year and 96