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question 214

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Use the following to answer questions: Use the following to answer questions:   -(Table: The Consumer Price Index (CPI) )  Use Table: The Consumer Price Index (CPI) . The consumer price index in 2009 was 212.2. In 2010, it was 216.7. What was the rate of inflation from 2009 to 2010? A)  12.2% B)  4.5% C)  2.1% D)  16.7%
-(Table: The Consumer Price Index (CPI) ) Use Table: The Consumer Price Index (CPI) . The consumer price index in 2009 was 212.2. In 2010, it was 216.7. What was the rate of inflation from 2009 to 2010?


Definitions:

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true return on investment.

Nominal Interest Rate

The percentage increase in money that the borrower pays the lender, not adjusting for inflation.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, over a given period of time.

Purchasing Power

the value of currency expressed in terms of the amount of goods or services that one unit of money can buy.

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