If the CPI increased from 150 to 165 over a year, the inflation rate based on CPI is: MCQ with Answer and Explanation

If the CPI increased from 150 to 165 over a year, the inflation rate based on CPI is:

A. 65%

B. 10%

C. 15%

D. 16.5%

Answer: Option B

Solution (By JKExamLibrary)

Inflation rate = [(New CPI - Old CPI) / Old CPI] × 100 = (165 - 150)/150 × 100 = 15/150 × 100 = 10%. This measures the percentage increase in the price level.

This question belongs to: Accountancy and Statistics Statistics

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