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CPI/Inflation Question

Suppose the price index was 100 in 2014, 109 in 2015, and the inflation rate was lower between 2015 and 2016 than it was between 2014 and 2015. This means that:

a) the price index in 2016 must be lower than 109.0
b) the price index in 2016 must be lower than 118.0
c) the price index in 2016 must be lower than 118.9
d) the inflation rate between 2015 and 2016 was lower than 1.09%

The answer is C, why?
(edited 7 years ago)
erm, i do econ, but have no idea how to help, errr, @TheALevelStudent can you explain this please?!
Original post by nd_31
Suppose the price index was 100 in 2014, 109 in 2015, and the inflation rate was lower between 2015 and 2016 than it was between 2014 and 2015. This means that:

a) the price index in 2016 must be lower than 109.0
b) the price index in 2016 must be lower than 118.0
c) the price index in 2016 must be lower than 118.9
d) the inflation rate between 2015 and 2016 was lower than 1.09%

The answer is C, why?


Original post by CleverSquirrel
erm, i do econ, but have no idea how to help, errr, @TheALevelStudent can you explain this please?!


This question if fundamentally a maths question based on economic theory. I have done my best to explain it, but if you are still unsure please ask.

image.jpg


Excuse my messy handwriting - I'm a boy
(edited 7 years ago)
Reply 3
Avatar for Speckle
Speckle
18
Original post by TheALevelStudent
This question if fundamentally a maths question based on economic theory. I have done my best to explain it, but if you are still unsure please ask.

image.jpg


Excuse my messy handwriting - I'm a boy


100 to 109.

0.09% increase.

:clap2::clap2::clap2:
Original post by TheALevelStudent
This question if fundamentally a maths question based on economic theory. I have done my best to explain it, but if you are still unsure please ask.

image.jpg


Excuse my messy handwriting - I'm a boy


awesome!!! thaaannnnkk ju very much!!!! :yep:

your writing is actually neater than mine....and i'm a girl :rofl:
(edited 7 years ago)
Original post by Speckle
100 to 109.

0.09% increase.

:clap2::clap2::clap2:


I don't understand what you are trying to say? :K:

Original post by CleverSquirrel
awesome!!! thaaannnnkk ju very much!!!! :yep:

your writing is actually neater than mine....and i'm a girl :rofl:


Lmao, every girl I know has flawless handwriting - and they all say its bad loool
Reply 6
Avatar for nd_31
nd_31
OP
Original post by TheALevelStudent
This question if fundamentally a maths question based on economic theory. I have done my best to explain it, but if you are still unsure please ask.

image.jpg


Excuse my messy handwriting - I'm a boy


Thank you!!! :smile:
Reply 7
Avatar for Speckle
Speckle
18
Original post by TheALevelStudent
I don't understand what you are trying to say? :K:




Should be 9% bro.
Original post by Speckle
Should be 9% bro.


In terms of inflation it is 0.09%

Inflation is calculated by the new value - the old value / the old value.
(109-100)/100 = 9/100 = 0.09%

I understand what you are trying to say but I got the answer right so...
Original post by TheALevelStudent
In terms of inflation it is 0.09%

Inflation is calculated by the new value - the old value / the old value.
(109-100)/100 = 9/100 = 0.09%

I understand what you are trying to say but I got the answer right so...


Your handwriting is perfect!
Omg
I love the way you write numbers
lol

Plus that's pretty nice handwriting for a boy :smile:
Original post by AppleB
Your handwriting is perfect!
Omg
I love the way you write numbers
lol

Plus that's pretty nice handwriting for a boy :smile:


aww thanks apple
Reply 11
Avatar for Armpits
Armpits
2
Original post by TheALevelStudent
In terms of inflation it is 0.09%

Inflation is calculated by the new value - the old value / the old value.
(109-100)/100 = 9/100 = 0.09%

I understand what you are trying to say but I got the answer right so...


9/100 does not equal 0.09/100...
Original post by Armpits
9/100 does not equal 0.09/100...


The value of the inflation is 0.09, whether inflation is measured as a percentage or something else i do not know. But in terms of working that is the correct way to get the right answer
Original post by TheALevelStudent
aww thanks apple


:colondollar:

:mmm::jumphug:
Reply 14
Avatar for Armpits
Armpits
2
Original post by TheALevelStudent
The value of the inflation is 0.09, whether inflation is measured as a percentage or something else i do not know. But in terms of working that is the correct way to get the right answer


0.09 = 9%

Working seems fine provided you just stuck the % sign superfluously.
@nucdev


Where have i gone wrong? My method seems logical and i get the right answer, however i understand what the other users are saying and their points are completely valid
Original post by Armpits
0.09 = 9%

Working seems fine provided you just stuck the % sign superfluously.


I think that is it lol, thank you
Reply 17
Avatar for nucdev
nucdev
18
Original post by TheALevelStudent
@nucdev


Where have i gone wrong? My method seems logical and i get the right answer, however i understand what the other users are saying and their points are completely valid


You're working out is fine - it's just that you wrote (109-100)/100 = 0.09%
It should just be 0.09. The sign is unnecessary (in fact it's wrong lol)

0.09 is the same as 9%
Original post by nucdev
You're working out is fine - it's just that you wrote (109-100)/100 = 0.09%
It should just be 0.09. The sign is unnecessary (in fact it's wrong lol)

0.09 is the same as 9%


Yeah i realised lmao, silly me
Original post by TheALevelStudent
Yeah i realised lmao, silly me



:slap:

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