Question

The figures in the following table were taken from consumer price index of three countries

Which country has the lowest rate of inflation between 2014-15?

Country	2014	2015
ABC	110	120
DEF	130	140
XYZ	90	101

Answer 1

The consumer price index (CPI) reflects the general level of consumer prices in an economy. Therefore, the rate of change of CPI can be construed as the rate of inflation in a country.

Therefore, between 2014 and 2015, the rates of inflation in the 3 countries were:
Country ABC: Inflation Rate = (120 – 110)/110 = 10/110 = 9.09%
Country DEF: Inflation Rate = (140 – 130)/130 = 10/130 = 7.69%
Country XYZ: Inflation Rate = (101 – 90)/90 = 11/90 = 12.22%

Therefore, based on the above calculation, country DEF had the lowest rate of inflation between 2014 and 2015.