1. The rate of inflation between the two years is _____%?? I don't understand how to...

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Question

1. The rate of inflation between the two years is _____%?? I don't understand how to...

1. The rate of inflation between the two years is _____%??
I don't understand how to attempt this question if you could show work it would be so much appreciated! Below you will see the answers I found to other problems that may help in answered question #1.

	2014		2015
Good	Quantity	Price	Quantity	Price
Oranges	550	1.00	700	1.20
Muffins	825	5.00	1050	5.25
Hot Dogs	900	7.00	900	8.00

If 2014 base year- then GDP for 2014 is 10,975
Assuming 14 is base yr, real GRP for 15 is 12,250
if 14 base yr, GDP deflator is 100
If 14 base yr, 15 deflator is 90.389

The economic growth b/t the 2 years us defined by % change real GDP is 11.61

business economics

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Answer 1

Answer #1

Find the cost of a basket of goods for 2014 and index it to 100.
In other words, 2014 is the base year.
Calculate the CPI (consumer price index) for 2014 and 2015 and then find the inflation rate.

	2014		2015
Good	Quantity	Price	Quantity	Price
Oranges	550	1	700	1.2
Muffins	825	5	1050	5.25
Hotdogs	900	7	900	8
Sum of quantity* Price	10975		13552.5

CPI in 2014	((10975/10975)*100))
CPI in 2014	100

CPI in 2015	(13552.5/10975)*100
CPI in 2015	123.49

Using the CPI's in both years, calculate the inflation rate:
Inflation rate	(123.49-100)/100
Inflation rate	23.49%

The rate of inflation between the two years is 23.49%.

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Answer 2

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