Hypothetical Marcoeconomics Question?

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Hypothetical Marcoeconomics Question?

The CPI for 2006 was 198.4 and 07 looks as though it will read 190.8 What is the level of inflation? How would you figure this question out? Can Anyone who answers this show me what process goes into answering this question thanks.

2007-03-17 05:14:55 · 2 answers · asked by street_life_king 1 in Social Science ➔ Economics

2 answers

Inflation is calculated by taking the percent change in the CPI.

So, inflation = 100*(P2007 - P2006)/P2006

= 100*(190.8-198.4)/1984.

So inlfation was - 3.8 percent

2007-03-17 08:03:59 · answer #1 · answered by Allan 6 · 0⤊ 0⤋

It is a decrease by 7.6 so that would indicate potential recession, not inflation.

You also have to see what the GDP is for both years.

2007-03-17 12:28:28 · answer #2 · answered by Santa Barbara 7 · 0⤊ 0⤋