Question

Which of the following correctly identifies the expression for calculating the inflation rate for period t, based on the CPI? Multiple Choice i = CPI-CP СРІ, O- CP CPT X 100 CP-CP CP o x 100

Answer 1

option n is correct. ita CP1t+1-CP It CPIL i e Inflation Rate current period - prior period CPI Cora CPI prior period cpi CPI the to Subtract the starting date from the later date CPI and divide our answer by starting date CPI multiply the results by your answer is the Pinflation rate at percentage a JOO-

Using this formula

The general economy-wide inflation rate over a period is calculated as the rate of change in the consumer price index (CPI).

There are other, more specific, inflation rates you can use depending on what your intention is.

The producer price index would be more applicable for producers (also as domestic producers or manufacturing) and a university endowment fund could calculate an inflation rate that was more relevant based on changes in research costs, professor salaries etc.