Question

If the consumer price index changes from 125 in september to 150 in october, what is the rate of inflation?

Answer 1

If the consumer price index changes from 125 in september to 150 in october, the rate of inflation is a. 20.0%

Further explanation

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 = $\frac{(150-125)}{125} * 100$

$\frac{25}{125 } *100$

$=0.2 * 100 \\= 20%$

Learn more

1. Learn more about  the consumer price index brainly.com/question/12142722
2. Learn more about the rate of inflation brainly.com/question/11632314
3. Learn more about inflation brainly.com/question/1419222

Answer details

Grade:  9

Subject:  business

Chapter:  the consumer price index

Keywords:   the consumer price index, september, october, the rate of inflation, inflation

Answer 2

The rate of inflation is analogous to the percent difference of the original to the new price. Thus, its formula is written as:

Rate of Inflation = [New price - Base price]/Base Price * 100
Rate of inflation = (150 - 125)/125 * 100 = 20%

So, the answer is A.