A country's central bank announced that the annual inflation rate for the past year was 4%. If the price index at the end of the year was 156, what was the price index at the beginning of the year? Please provide the final numerical answer.

Google

This example demonstrates how to calculate the inflation rate for 2021. Given a Consumer Price Index (CPI) of 100 for the previous year and 142.22 for 2021, the inflation rate is calculated using the percentage change formula: $$\text{Inflation Rate} = \frac{142.22 - 100}{100} \times 100 = 42.2\%$$ This calculation indicates a 42.2% inflation rate for 2021.

Example Calculation of the 2021 Inflation Rate

Suppose the value of a price index was 250 in one year and 265 in the following year. What was the percentage change in the price level between the two years?

Calculating a Previous Year's Price Index

Based on the provided data, calculate the annual inflation rate for Year 2 and Year 3. Then, using your calculations, determine whether inflation is accelerating, decelerating, or if the economy is experiencing deflation. Explain your reasoning.

Learn Before

Related