In Nigeria, if the Consumer Price Index (CPI) rises from 180 to 198 within one year, what is the rate of inflation for that year?
A8%
B10%CORRECT
C12%
D18%
GCEEconomicsInflation and Unemployment2024
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Why the answer is B, and why the others tempt you.
The inflation rate is calculated as $\frac{\text{New CPI} - \text{Old CPI}}{\text{Old CPI}} \times 100 = \frac{198 - 180}{180} \times 100 = \frac{18}{180} \times 100 = 10\%$. Option A (8%) and C (12%) are common arithmetic errors, while D (18%) confuses the absolute change with the percentage change.
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