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Is consumer price index the same as inflation?

Inflation and Consumer price index question need help please?

  • If the consumer price index (CPI) for the year 2004 is 190, does that mean that (the annual rate of) inflation in 2004 was 90 percent ? A.) Yes. A CPI of 190 is an 90 percent increase from 100. B.) No. the inflation rate is always the same as the nautural rate of unemployment which is about 5 percent C.) Yes. A CPI of 190 is an 90 percent increase in the price level from the base year. The inflation rate in 2004 is 90 percent D.) No. the inflation rate is the percentage increase in the price level from the previous year, not the base year which one is it please help thank you

  • Answer:

    D.

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Most appropriate answer is: D.) No. the inflation rate is the percentage increase in the price level from the previous year, not the base year. [ if the base year is 2003, then CPI for 2003 would be 100 or the CPI for 2003 happen to be 100, and with CPI of 190 for 2004, the annual inflation rate for 2004 would have been 90%].

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