|Year||Consumer Price Index||Inflation Rate|
Assume the year 2005 is used as the base year. What belongs in space E?
Consumer Price Index:
Consumer price index is a measure of an economy's overall price level. It is computed as the weighted average price of goods in a basket of goods that is representative of the average consumer. Changes in the consumer price index indicates the level of inflation.
Answer and Explanation:
The answer is b).
The number in space E represents inflation in 2010. The rate of inflation in period t is computed as:
- (CPI in period t - CPI in...
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Learn more about this topic:
from Economics 102: MacroeconomicsChapter 5 / Lesson 1
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