Question

1. (Inflation)Here are some recent data on the U.S. consumer price index:

            Year     CPI                  Year     CPI                  Year     CPI                  Year     CPI

            1988     118.3                1993     144.5                1998     163.0                2003     184.0

            1989     124.0                1994     148.2                1999     166.6

            1990     130.7                1995     152.4                2000     172.2

            1991     136.2                1996     156.9                2001     176.9

            1992     140.3                1997     160.5                2002     179.9

Compute the inflation rate for each year 1989-2003 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?

Answer 1

Inflation Formula = (CPIcurrent/CPIold-1)*100