No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Macroeconomic Performance (5 of 10)

Question 5:
Assume that the consumer price index increased from 100 to 150 between year one and year two. What is the rate of inflation for year two?

A.  1.5%
B.  50%
C.  67%
D.  150%
E.  200%

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Correct Answer: B, 50%. To calculate consumer inflation: (CPI current - CPI original) divided by (CPI original). Lastly, multiply the final answer by 100. Or NEW minus OLD over OLD times 100!