Macroville CPI 100→105; inflation rate 2013-14 is:

Rationale

The inflation rate from 2013 to 2014 in Macroville is 5%.

To calculate the inflation rate, the formula used is: \((CPI_{new} - CPI_{old}) / CPI_{old} \times 100\). Applying this to the CPI values given (100 to 105) results in an inflation rate of 5%.

A (10.50%) YOUR ANSWER

This choice miscalculates the inflation rate by incorrectly applying the formula or misinterpreting the CPI values. A 10.50% inflation rate would imply a significant increase beyond the actual CPI change from 100 to 105, which only represents a 5% increase.

B (5%) CORRECT

Using the formula \((105 - 100) / 100 \times 100\) gives the correct inflation rate of 5%. This reflects the accurate percentage increase in the Consumer Price Index from 2013 to 2014.

C (4.76%) YOUR ANSWER

This option presents a value close to the correct answer but is derived from an incorrect calculation of the inflation rate based on the CPI figures. The correct approach yields a straightforward 5% rather than a fraction.

D (0.50%) YOUR ANSWER

This choice significantly underestimates the inflation rate by misapplying the formula or misinterpreting the CPI values. A 0.50% inflation rate would suggest an almost negligible change, which does not align with the CPI increase from 100 to 105.

Conclusion

The inflation rate in Macroville from 2013 to 2014 is accurately calculated as 5% based on the change in the Consumer Price Index. This rate reflects a straightforward increase from a CPI of 100 to 105, demonstrating how inflation is quantified through percentage changes in such indices. Other options either miscalculate or misinterpret the CPI data, leading to incorrect inflation rate estimates.

Macroville CPI 100→105; inflation rate 2013-14 is:

The inflation rate from 2013 to 2014 in Macroville is 5%.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test