Problem Set 8.3
Benchmarking Inflation
The following inflation figures were calculated using the Consumer Price
Index for All Items (CPI-U) and represent the percent change from the
previous year.
1960 1.7
1961 1.0
1962 1.0
1.3
1963
1964 1.3
1965
1.6
1966-
2.9
1967 3.1
1968 4.2
1969
5.5
1970 5.7
1971 4.4
1972
3.2
1973
6.2
1974 11.0
1975
9.1
1976
5.8
1977
6.5
1978
7.6
1979 11.3
1980 13.5
1981
10.3
1982
6.2
1983
3.2
1984
4.3
1985
3.6
1986
1.9
1987 3.6
1988
4.1
1989
4.8
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
1. Plot the points for the percent change in the CPI for the decade of
the 1960s on the graph below. Draw a horizontal line on your graph
at the average
level of infla-
tion for the
decade.
2. Plot the points for the percent change in the CPI for
the decade of the 1970s on the graph to the right.
Draw a horizontal line on your graph at the average
level of inflation for the decade.
5.4
4.2
3.0
3.0
2.6
2.8
3.0
2.3
1.7
1.9
2000
3.6
2001 3.3
2002
1.1
2003
2.2
2004
2.9