In the link below, which component of Canada's CPI registered the fastest rate of inflation over the period shown? What is the answer for question 4: http://postimage.org/image/nwb6cv2ef/

Expert Answers

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When we follow the instructions in the link below, we get to this page.  There, we can see the changes in price level for various components of the CPI.  The top table shows us the actual price level while the bottom chart shows us the percent change in that price level from the previous year.  A faster rate of inflation is shown by larger numbers in the bottom chart.  It can also be seen in the difference between the last year (2011) and the first year (2007) in the top chart.

From these data, we can see that food was the component that had the fastest rate of inflation.  If we calculate the rate of inflation for food by using the equation

(CPI in 2011 – CPI in 2007) / CPI in 2007

we get

(127.7-111.8)/111.8.

That calculates to 15.9/111.8 = 14.2%

The rate of inflation for food was 14.2% for this five year period.  This is higher than any other component.

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