Question 60

The inflation rate for Macroville from 2013 to 2014 is 5%.

The inflation rate can be calculated using the Consumer Price Index (CPI) values. With a CPI of 100 in 2013 and 105 in 2014, the inflation rate is determined by the formula: [(CPI in 2014 - CPI in 2013) / CPI in 2013] * 100, resulting in a 5% increase.

A) 10.50%

This option miscalculates the inflation rate by an incorrect application of the CPI values. The formula used here does not reflect the proper calculation method, leading to an inflated inflation rate that does not correspond with the CPI change.

B) 5%

This is the correct answer, as it accurately reflects the inflation rate calculated from the CPI values. The increase from 100 to 105 represents a 5% rise, which is calculated as [(105 - 100) / 100] * 100 = 5%.

C) 4.76%

This option incorrectly calculates the inflation rate, possibly by misapplying the percentage change formula or misinterpreting the CPI values. The correct calculation yields an inflation rate of 5%, not 4.76%.

D) 0.50%

This option significantly underestimates the inflation rate. A change from 100 to 105 reflects a much larger increase than 0.50%, indicating a fundamental misunderstanding of how to calculate percentage changes in CPI.

Conclusion

Option B is definitively correct as it accurately reflects the inflation rate derived from the change in the CPI values for Macroville. All other options fail to properly compute the inflation rate based on the provided data, leading to incorrect conclusions about the economic conditions during that period.