average price per gallon was $4.16. This week, US gas prices reached $4.19, a new record high nominal price. In July 2008, the CPI was 219.964 The most current reading of the CPI is 283.716 Use this information to answer the following: 1. What was the rate of inflation from July 2008 to present? Answer is: 28.98% 2. What would the nominal price of gas be today if gas prices rose at the same rate (since July 2008) as the overall inflation rate you calculated in part 1? Answer: Nominal price = 4.16 + 4.16 × 28.98%=4.16 + 1.205=5.36 3. Is the current gas price of $4.19 the highest real price of gas on record? (use your answer to part 2 to figure this out)
We're hearing a lot about high gas prices, so let's investigate.
The US record-high gas prices previously occurred in July 2008, when the national average
This week, US gas prices reached $4.19, a new record high nominal price.
In July 2008, the
The most current reading of the CPI is 283.716
Use this information to answer the following:
1. What was the rate of inflation from July 2008 to present? Answer is: 28.98%
2. What would the nominal price of gas be today if gas prices rose at the same rate (since July 2008) as the overall inflation rate you calculated in part 1? Answer: Nominal price = 4.16 + 4.16 × 28.98%=4.16 + 1.205=5.36
3. Is the current gas price of $4.19 the highest real price of gas on record? (use your answer to part 2 to figure this out)
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