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If the consumer price index falls from 140 to 135 in a year, what is the deflation rate?

1 Answer

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Final answer:

The deflation rate can be calculated using the percentage-change formula. In this case, the consumer price index falls from 140 to 135 in a year. The deflation rate is -3.57%.

Step-by-step explanation:

The deflation rate can be calculated using the percentage-change formula. In this case, the consumer price index falls from 140 to 135 in a year. To calculate the deflation rate, we first find the change in the price index: (135 - 140) = -5. Then, we divide this change by the initial price index and multiply by 100 to get the percentage change: (-5 / 140) * 100 = -3.57%.

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