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posted by  mhg on 7/11/2009 2:39:45 AM  |  status: Live  |  Earned Karma: 25

Economics

Course Textbook Chapter Problem Needs by
Economics Macroeconomics by William A McEachern student edition 8 N/A N/A
Question Details:
Compute inflation rate for each year 1989 - 2006 and determine which years were years of inflation. In which years did deflation occur? In which years did disinflation occur? was there hyperinflation in any year?
Year                     CPI
1999                     166.6
2000                     172.2
2001                     177.1
2002                     179.9
2004                     188.9
2005                     195.3
2006                     201.8
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Sage
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posted by Domokun on 7/11/2009 11:18:57 AM  |  status: Live
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Response Details:
Years    Inflation
99-00    (172.2 - 166.6) / 166.6 = 0.0336
00-01    (177.1 - 172.2) / 172.2 = 0.0285
01-02    0.0158
02-04    0.0500 (annualize to arrive at 0.0247 per year from 02-03 and 03-04)
04-05    0.0339
05-06    0.0333
Inflation occurred every year, since the CPI increased every year, but there was neither any hyperinflation nor any disinflation.
Tags: Inflation
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