If the consumer price index is 105 in Year One and 110 in Year Two, what is the rate of inflation from Year One to Year Two?(1 point)Responses4.8%4.8%0.05%0.05%-4.8%-4.8%4.5%
The rate of inflation from Year One to Year Two can be calculated using the formula:
Inflation rate = (CPI Year Two - CPI Year One) / CPI Year One
In this case, CPI Year One is 105 and CPI Year Two is 110.
Inflation rate = (110 - 105) / 105
= 5 / 105
≈ 0.048 or 4.8%
So, the rate of inflation from Year One to Year Two is approximately 4.8%. Therefore, the correct response is 4.8%.