Understanding Inflation

If the cost of purchasing the basket of goods rises from $200 to $400 in period1 to period 2 then what is the rate of inflation?

For periods 1 and 2, the price indices are 93.4and 99.5 respectively. Then the inflation rate is given by

If the cost of purchasing the basket of goods for four years is as follows:

Year 1= $400

Year 2= $600       

Year 3=$800

Year 4=$1200

Assuming year 2 as the base year the price indices for each year are

Which of the following best describes the inflation rate?

Which of the following is an effect of inflation?

Inflation is the state in which

If the cost of purchasing a basket of goods is $900 for the year 2019 and $700 for the year 2018. Calculate the annual rate of inflation for the year 2019.

Which of the following statement are true with regards to the basket of goods?

If the price of the basket of goods increases by 2% in a year this implies

Inflation is a relative change in the prices of goods

If the price indices for year 1 and 2 are 800 and 1200 respectively. Calculate the rate of inflation.

Based on the basket of goods in the table below, by what percentage has the cost of living increased between time one and two?

Using the information below on the cost of purchasing a basket of goods over four years, calculate the price indices using year four as the base year.

The basket of goods is __________

Which one of the following statements about inflation is true? Inflation refers to: