Suppose you have the following data on CPI and GDP deflator for 2018 and 2019: Year CPI GDP Deflator 2018 251.101 110.292 2019 255.651 112.262 Then the rate of inflation between 2018 and 2019 (rounded to 2nd decimal place) based on CPI is whereas the rate of inflation based on GDP deflator between 2018 and 2019 (rounded to 2nd decimal place) is
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To calculate the inflation rate based on CPI, we use the formula: Inflation rate = (CPI in 2019 - CPI in 2018) / CPI in 2018 * 100 Using the given data: CPI in 2018 = 251.101 CPI in 2019 = 255.651 Inflation rate based on CPI = (255.651 - 251.101) / 251.101 * Show more…
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