Which activity is included in GDP?
The inflation rate from 2013 to 2014 in Macroville is 5%.
To calculate the inflation rate, we use the formula: \((CPI_{new} - CPI_{old}) / CPI_{old} \times 100\). In this case, the CPI increased from 100 to 105, leading to an inflation rate of \((105 - 100) / 100 \times 100 = 5%\).
This choice miscalculates the inflation rate. A 10.50% rate would imply a much larger increase in the CPI than what is given. The correct calculation shows that the change in CPI represents only a 5% increase, far less than 10.50%.
This is the correct choice, as it accurately reflects the inflation rate calculated from the change in CPI from 100 to 105. The inflation rate is derived directly from the formula applied to the provided CPI values.
This option suggests a different calculation that does not align with the CPI change. To derive 4.76%, one would need to use an incorrect base or misinterpret the CPI values. The correct calculation yields a straightforward 5% inflation rate.
Choosing 0.50% indicates a severe underestimation of the inflation rate. This value would imply that the CPI has changed negligibly, which contradicts the actual increase from 100 to 105. The actual increase represents a significant inflation of 5%.
The inflation rate for Macroville from 2013 to 2014 is calculated to be 5%, as determined by the change in the Consumer Price Index. Understanding how to apply the CPI formula is crucial for accurate inflation rate assessments. Options A, C, and D reflect miscalculations or misunderstandings of the CPI data, reinforcing the importance of precise mathematical application in economic contexts.
Related Questions
View allU.S. central bank increases money supply â†' interest rates â...
Opportunity cost of moving from point T to U on PPC is:
National debt increases when:
If real GDP doubled from year 1 to 2, which must be true?
Below full employment: fiscal policy to restore equilibrium is:
Related Quizzes
View allAmerican Government CLEP Cheat Sheet
CLEP College Algebra Exam Questions
CLEP College Algebra Exam Guide
CLEP College Mathematics Exam Secrets Study Guide
CLEP History of the United States II Examination Guide
CLEP History of the United States II Examination Guide
Humanities CLEP Test Study Guide
CLEP Humanities Test Questions
CLEP Introductory Psychology Examination Guide
CLEP Western Civilization I Exam Secrets Study Guide
- ✓ 500+ Practice Questions
- ✓ Detailed Explanations
- ✓ Progress Analytics
- ✓ Exam Simulations