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    Inflation rates

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    Please help me with the following problems.

    1. Complete the table (see attached) by filling in the banks.
    2. Which Decade has the most inflation?
    3. How much did consumer prices change during the Great Depression from 1930 to 1940.
    4. In 1925, the cost of a Model T Ford was $290. What is the equivalent cost at 2008 price levels using the CPT?
    5. From 2000 to 2008, which of the following prices increased the most? (Use data from the Consumer Prices - All Urban Consumers page in the Economic Indicators posted under Handouts in Blackboard):
    - food
    - owners' equivalent rent
    - apparel
    - transportation
    - medical care

    (see attached file for remaining problems)

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    Solution Preview

    See attached. I have included a Word document, and a PDF document just in case there are issues with the graphs on the Word document.

    1. Inflation data is as follows:

    Inflation rates are calculated using the following formula:

    Inflation = ((Change in CPI)/(Average CPI of the Intervening Years))*100

    Thus to find the inflation rate from 1940 to 1950, the expression is

    Inflation = ((24.1 - 14.0)/((24.1 + 14.0)/2))*100 = 53.02%.

    2. As you can see from the table the decade with highest inflation rate was the 1970s. Between ...

    Solution Summary

    Inflation rates are calculated and assessed in this solution.