Answer :
The inflation rate between 2010 and 2011 is 28.35%, the percentage change in the price per pound of coffee between 2010 and 2011 is 66.67% and CPI can be used to calculate inflation by measuring the change in prices of a basket of goods and services over time
a. To calculate the inflation rate between 2010 and 2011, we can use the following formula:
Inflation rate = ((CPI in year 2 - CPI in year 1) / CPI in year 1) x 100
Substituting the values from the table, we get:
Inflation rate = ((163 - 127) / 127) x 100 = 28.35%
Therefore, the inflation rate between 2010 and 2011 is 28.35%.
b. To calculate the percentage change in the price per pound of coffee between 2010 and 2011, we can use the following formula:
Percentage change = ((Price in year 2 - Price in year 1) / Price in year 1) x 100
Substituting the values from the table, we get:
Percentage change = (($15 - $9) / $9) x 100 = 66.67%
Therefore, the percentage change in the price per pound of coffee between 2010 and 2011 is 66.67%.
c. CPI can be used to calculate inflation by measuring the change in prices of a basket of goods and services over time. CPI is calculated by comparing the prices of the same basket of goods and services in different years. The percentage change in CPI between two years represents the inflation rate. By using CPI, we can track changes in the cost of living over time and adjust for inflation when comparing prices across different periods.
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