Question Two (30 points)

Here are values of the CPI (multiplied by 100) for each year from 1990 to 2000.

For each year beginning with 1991, calculate the rate of inflation from the previous year.(15 points)

Round your answers to 1 decimal place.

Year

CPI

Inflation Rate (%)

1990

130.7

1991

136.2

1992

140.3

1993

144.5

1994

148.2

1995

152.4

1996

156.9

1997

160.5

1998

163

1999

166.5

2000

172.2

a)What happened to inflation rates over the 1990s? Compared to 1990-1991, the inflation rates remained ...................throughout the 1990`s.

Select the right answer:

a)the same

b)higher

c)lower

Explain and justify your answer. (15 points)