SOLUTION: From Table 21.5, you can determine the rate of inflation from one year to the next. For example, you find the rate of inflation from 1991 to 1992 by subtracting the two index numb

Question 72444This question is from textbook For All Practical Purposes
: From Table 21.5, you can determine the rate of inflation from one year to the next. For example, you find the rate of inflation from 1991 to 1992 by subtracting the two index numbers and dividing the earlier one: (140.6-136.2)/136.2=0.032=3.2%. Similarly, knowing the rate of inflation, you can compute one index number from another.
a) What was the rate of inflation from 1980 to 1981
b) For a 3% rate of inflation per year from 2003 on, what would the Co nsumer Price Index be in 2006?
This question is from textbook For All Practical Purposes

Answer by Edwin McCravy(20060) (Show Source): You can put this solution on YOUR website!
From Table 21.5, you can determine the rate of inflation from one year to the next. For example, you find the rate of inflation from 1991 to 1992 by subtracting the two index numbers and dividing the earlier one: (140.6-136.2)/136.2=0.032=3.2%. Similarly, knowing the rate of inflation, you can compute one index number from another.
a) What was the rate of inflation from 1980 to 1981
b) For a 3% rate of inflation per year from 2003 on, what would the Co nsumer Price Index be in 2006?


We don't have Table 21.5, so we cannot 
help you.  Repost with Table 21.5.

Edwin

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