If the consumer price index were 233.8 last year,261.3 today,a level of _____ next year would represent disinflation.

A) 261.3
B) 661.3
C) 283.1
D) 260.0
E) 301.3

Question

If the consumer price index were 233.8 last year,261.3 today,a level of _____ next year would represent disinflation.A) 261.3B) 661.3C) 283.1D) 260.0E) 301.3

katrina davis · Accepted Answer

Final Answer : D, Explanation :  Disinflation occurs when the rate of inflation decreases. If the CPI was 233.8 last year and 261.3 today, then the rate of inflation was (261.3 - 233.8) / 233.8 * 100 = 11.7%. If the CPI were to increase to 260.0 next year, then the rate of inflation would be (260.0 - 261.3) / 261.3 * 100 = -0.5%. This would represent disinflation.

If the consumer price index were 233.8 last year,261.3 today,a level of _____ next year would represent disinflation.

A) 261.3
B) 661.3
C) 283.1
D) 260.0
E) 301.3

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