Which of the following changes in the price index produces the greatest rate of inflation: 106 to 112, 112 to 118, or 118 to 124

Question

3 years ago

6

?
a. 106 to 112
b. 112 to 120
c. 118 to 126
d. All of these changes produce the same rate of inflation.

1 answer:

boyakko [2] · Answer 1 · 2022-04-09T08:48:19+03:00

Answer:

A

Step-by-step explanation:

firstly you have to find the rate of change of the various price index in percentage.

A, From 106 to 112:

we find the difference 112-106 = 6

then the rate of change = 6/106 * 100 = 5.66%.

B ,From 112 to 118:

we find the difference 118-112 = 6

then the rate of change = 6/118 * 100 = 5.36%.

C ,From 118 to 124:

we find the difference 124-118 = 6

then the rate of change = 6/124 * 100 = 5.08%.

we can see that the price index with the greatest percentage is A.