High School

For an imaginary economy, the value of the consumer price index was 140 in 2013 and 146.5 in 2014. The economy's inflation rate for 2014 was:

A. 4.6 percent
B. 6.5 percent
C. 4.6 percent
D. 46.5 percent
E. None of the above

Answer :

Final answer:

The inflation rate is found by calculating the percentage change in the CPI from one year to the next, which in this scenario is approximately 4.6 percent for the year 2014, making the correct answer c. 4.6 percent.

Explanation:

To calculate the inflation rate for the given imaginary economy, you would use the Consumer Price Index (CPI) values for the consecutive years and apply the formula for percentage change:

Inflation Rate = ((CPI in 2014 - CPI in 2013) / CPI in 2013) × 100%

Using the provided CPI values, the inflation rate would be calculated as follows:

Inflation Rate = ((146.5 - 140) / 140) × 100% = (6.5 / 140) × 100% = 4.64285714...

Therefore, the inflation rate for 2014 when rounded to one decimal place is approximately 4.6 percent.

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