Which of the following statements is true?
A)Even if we know the values of the consumer price index for the years 2009 and 2010,we cannot calculate the inflation rate for 2010 if we do not know which year is the base year.
B)If we know the base year is 1990,and if we know the value of the consumer price index for the year 2010,then we have all the information we need to calculate the inflation rate for 2010.
C)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the inflation rate for 1995.
D)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000.

Question

Quizplus · Accepted Answer

Knowing the base year and the value of the consumer price index for two different years allows us to calculate the percentage change in the cost of living between those two years. Therefore, we can calculate the percentage change in the cost of living between 1995 and 2000 if we know the base year is 2000 and the value of the consumer price index for 1995. Option A is incorrect because we need to know the base year to calculate the inflation rate for a specific year. Option B is incorrect because we need to know the consumer price index for the base year as well. Option C is incorrect because we cannot calculate the inflation rate for a year before the base year.

Which of the Following Statements Is True