Ask a New Question
Menu

If the Consumer Price Index (CPI) falls from 125 to 121 in a particular year, the economy has experienced:

inflation of 3.2%.
inflation of 3.3%.
deflation of 3.2%.
deflation of 3.3%.

1 answer

Deflation of 3.2%.

Deflation occurs when there is a decrease in the general price level of goods and services. In this case, the CPI falling from 125 to 121 indicates a decrease in prices, resulting in deflation. The calculation to determine the percentage change in the CPI is (121-125)/125 * 100 = -3.2%, indicating a 3.2% decrease in the CPI and therefore deflation.
Similar Questions
  1. Select the correct answer.The table represents the Consumer Price Index for a basket of goods and services for three consecutive
    1. answers icon 1 answer
  2. The Consumer Price Index of any given year provides _____.(1 point)Responses the nominal price of a basket of consumer goods the
    1. answers icon 1 answer
  3. Causes and Impact of Inflation Quick Check4 of 54 of 5 Items Question The Consumer Price Index of any given year provides
    1. answers icon 1 answer
  4. The Consumer Price Index of any given year provides _____.(1 point)Responses the nominal price of a basket of consumer goods the
    1. answers icon 1 answer
more similar questions