The table below shows the price index for Zimbabwe starting in 2000.

www.econstats.com
Which of the following statements CORRECTLY describe the behavior of prices in Zimbabwe?
i.The cost of the CPI basket increased.
iI.The inflation rate was 73.4 percent between 2000 and 2001.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

The table below shows the price index for Zimbabwe starting in 2000.

www.econstats.com
Which of the following statements CORRECTLY describe the behavior of prices in Zimbabwe?
i.The cost of the CPI basket increased.
iI.The inflation rate was 73.4 percent between 2000 and 2001.
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Quizplus · Accepted Answer

I is correct because the price index increased from 100 in 2000 to 273.4 in 2001, indicating that the cost of the CPI basket increased. 
II is also correct because the percentage change in the price index between 2000 and 2001 is (273.4 - 157.7)/157.7 x100% = 73.4%.

The Table Below Shows the Price Index for Zimbabwe Starting