The CPI was 124.0 in 1989 and 130.7 in 1990. What was the rate of inflation over this period?
Correct answer B. 5.4 percent
Explanation
Inflation is the percentage change in the price index: (130.7 minus 124.0) divided by 124.0 equals about 0.054, or 5.4 percent. The base year does not matter for this calculation.
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