If the CPI was 110 last year and is 116 this year, what is this year’s rate of inflation?
Instructions: Round your answer to two decimal places. %
In contrast, suppose that the CPI was 110 last year and is 105 this year. What is this year’s rate of inflation?
Instructions: Round your answer to two decimal places. %
What term do economists use to describe this second outcome? Inflation/deflation