If the consumer price index changes from 125 in september to 150 in october, the rate of inflation is a. 20.0%
Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When inflation is too high, it is not good for the economy or individuals. Inflation always reduce the value of money, unless interest rates are higher than inflation. The less chance there is that savers will see the real return on their money if the inflation gets higher. There are causes of inflation such as demand-pull and Cost-push. They are responsible for a general rise in prices in an economy.
Policies to reduce inflation are such as monetary policy (Higher interest rates), Tight fiscal policy (Higher income tax and/or lower government spending that will reduce aggregate demand and leading to lower growth and less demand pull inflation).
The rate of inflation = 20%.
September's price = 125
October's price = 150
Rate of inflation = [tex]\frac{(150-125)}{125} * 100[/tex]
[tex]\frac{25}{125 } *100[/tex]
[tex]=0.2 * 100 \\= 20%[/tex]
Grade: 9
Subject: business
Chapter: the consumer price index
Keywords: the consumer price index, september, october, the rate of inflation, inflation
