Question

If the consumer price index is 105 in Year One and 110 in Year Two, what is the rate of inflation from Year One to Year Two? (1 point)
0.05%
4.8%
4.5%
-4.8%

Answer 1

Inflation = (110 − 105) / 105 = 5 / 105 ≈ 0.04762 = 4.8%.