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3 August, 13:49

If the CPI rises to 150 from 120, then prices have

A) risen 20 percent.

B) risen 25 percent.

C) risen 30 percent.

D) fallen 20 percent.

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Answers (1)
  1. 3 August, 14:17
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    B) risen 25 percent.

    Explanation:

    The inflation rate is the rate at which overall prices are increasing in the economy in a period. It is expressed as a CPI value.

    Given CPI for different periods, inflation can be calculated using the formula below.

    Inflation = new CPI - old CPI x 100

    old CPI

    In the case

    The inflation rate will be 150 - 120 x 100

    120

    =30/120 x 100

    =25%
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