Question

In the country of Sildavia, a market basket of goods and services cost $130 in 2003, $140 in 2004, and $160 in 2005. Based on this information and considering 2003 as the base year, inflation from 2003 to 2005 was ___________.

Answer 1

Answer:

=23.07 %

Explanation:

Inflation is the general increase in prices in a country over a period. To calculate inflation, economists will compare the current prices with the prices at the beginning of the year. The reference year is the year. Inflation is expressed as a percentage of the change in price between the current price and base year.

In the case, the base year is 2003

The change in prices will be 2005 price minus 2003 prices

=$160-$130

=$30

Percentage change will be 30/130 x 100

=0.2307 X100

=23.07 %