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entering january 2000, the price index for a basket of consumer goods was standardized at 100. this price index increased to 103.4 in january 2001, 106.2 in 2002, 108.5 in 2003, and 110.2 in 2004. calculate the inflation rates in 2000, 2001, 2002, and 2003

Sagot :

The inflation rate in 2000 is 3.4%, in 2001 is 6.2%, in 2002 is 8.5% and in 2003 is 10.2%.

In the given question,

Entering January 2000, the price index for a basket of consumer goods was standardized at 100.

This price index increased to

103.4 in January 2001

106.2 in January 2002

108.5 in January 2003

110.2 in January 2004

We have to calculate the inflation rates in 2000, 2001, 2002, and 2003.

The formula of Inflation Rate is

Inflation Rate = (B−A)/A ×100

where A = starting cost

B=Ending cost

The Starting cost A=100

Now finding the inflation rate in 2000.

price index increased to 103.4 in January 2001.

So B=103.4

Inflation Rate = (103.4−100)/100 ×100

Inflation Rate = 3.4/100 ×100

Inflation Rate = 3.4%

The inflation rate in 2000 is 3.4%.

Now finding the inflation rate in 2001.

price index increased to 106.2 in January 2002.

So B=106.2

Inflation Rate = (106.2−100)/100 ×100

Inflation Rate = 6.2/100 ×100

Inflation Rate = 6.2%

The inflation rate in 2001 is 6.2%.

Now finding the inflation rate in 2002.

price index increased to 108.5 in January 2003.

So B=108.5

Inflation Rate = (108.5−100)/100 ×100

Inflation Rate = 8.5/100 ×100

Inflation Rate = 8.5%

The inflation rate in 2002 is 8.5%.

Now finding the inflation rate in 2003.

price index increased to 103.4 in January 2004.

So B=110.2

Inflation Rate = (110.2−100)/100 ×100

Inflation Rate = 10.2/100 ×100

Inflation Rate = 10.2%

The inflation rate in 2003 is 10.2%.

To learn more about inflation rate link is here

brainly.com/question/19263433

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