Question

inflation can be calculated in terms of how the overall cost of ____________ changes over time.
all goods
the basket of goods
all goods and services
all goods and services

question 6
1 pts
if the price index moves from 107 to 110, the rate of inflation is:
3%
3%
28%
2.8%

Explanation:

Step1: Solve first fill-in

Inflation uses a representative basket of goods and services (standard measure) to track cost changes over time.

Step2: Calculate inflation rate

Use inflation formula: $\text{Inflation Rate} = \frac{\text{New Price Index} - \text{Old Price Index}}{\text{Old Price Index}} \times 100\%$
Substitute values: $\frac{110 - 107}{107} \times 100\% = \frac{3}{107} \times 100\% \approx 2.8\%$

Answer:

1. the basket of goods and services
2. 2.8%