1. The following graph shows the approximate value of the U.S. Consumer Price Index (CPI) from July 2005 through March 2006. CPI July 2005 Mar 2006 The approximate curve shown on the figure is given by 199 7(t)=0.066 -0.8 +3.1r+195 (05158) 198 where is time in months (r = 0 represents July 2005). 197 a. Estimate when the U.S. economy was experiencing 196 inflation? (Inflation means the CPI is increasing.) 195 3 5 7 D Jul-08 Jan (16 Mar 06 b. Estimate when the U.S. economy was experiencing deflation? (Deflation means the CPL is decreasing.) c. Use the model to estimate the monthly inflation rates in August 2005. December 2005 and February 2006. (Inflation rate is defined as See Example 3 in your text for more information.) d. Suppose it was reported on the news that "the growth in inflation is slowing." During what time period could this have been accurate? e. Was inflation slowing or speeding up in the following months: August 2005: February 2006