Although inflation has been extremely low at 0

Economics Dec 11, 2020

Although inflation has been extremely low at 0.9% average rate, economists now see trouble on the horizon due to the increases in commodity prices over the next five years. The leading economists expect commodity prices to inflate; at 1.4% annually the first year, 2.39 year two, 5.2% year three, 6.19 year four, and 7.8% year five. You need to revise your five-year project budget to include these expected increases in commodity prices. Compute the mean percentage inflation rate f for the five-year period to two decimal places accuracy. Attach File Browse Local Files Browse Content Collection

Expert Solution

Mean % Inflation rate = (1.4% + 2.3% + 5.2% + 6.1% + 7.8%)/5

=> 4.56 %

Here, mean is calculated based on simple average whose formula is = Sum of observations / Number of observations.

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