If the consumer price index rises from 120 to 126, the measured inflation rate is
Correct answer: B. 5 percent
- A. 4 percent
- B. 5 percent
- C. 6 percent
- D. 10 percent
Explanation
The inflation rate is calculated as (126 minus 120) divided by 120, multiplied by 100, which equals 5 percent. The index increased by six points, but the percentage change is measured relative to the original index.
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