Calculate the inflation rate for each year which year had...

calculate the inflation rate for each year. Which year had the highest rate of inflation, and which year had the highest rate of deflation? What is the average annual inflation rate?

Using the data from the appendix to this chapter, calculate the following: a. The inflation rate in 1981 and 2007 b. The growth rate of real GDP in 1982 and 1984 c. The average inflation rate from 1970 to 1980 and from 2000 to 2007 d. The average growth rate of real GDP from 1929 to 2008 I Hint: The formulas in the text give the technique for calculating 1-year growth rates. Growth rates for multiple years use the following formula: $$g_{t}^{(n)}=100 \times\left[\left(\frac{X_{t}}{X_{t-n}}\right)^{1 / *}-1\right]$$ where $g_{i}^{(x)}$ is the average annual growth rate of the variable $X$ for the $n$ years between year $(t-n)$ and year $t$ For example, assume that the CPI in $(t-2)$ is 100.0 while the CPI in year $t$ is $106.09 .$ Then the average rate of inflation is $100 \times\left[\left(\frac{106.09}{100.0}\right)^{1 / 2}-1\right]=3$ percent per year.

Question

calculate the inflation rate for each year. Which year had the highest rate of inflation, and which year had the highest rate of deflation? What is the average annual inflation rate?

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