Neco 2025 Economics Question 13

Practice objective / multiple choice question 13 from the 2025 Neco Economics examination.

Neco 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 13 NECO • 2025 • ECONOMICS • objective

In year 0 the Consumer Price Index (CPI) is \(120\). The government's monetary policy reduces the annual inflation rate by \(1.5\) percentage points each year, starting from \(6\%\) in year 1. However, a one‑off supply shock in year 3 adds an extra \(2\%\) to that year's inflation. Calculate the CPI at the end of year 5 and the average annual inflation rate over the whole five‑year period.

Answer Options

Correct Answer A. CPI after 5 years ≈ 147.34; average annual inflation ≈ 4.2 %
B. CPI after 5 years ≈ 148.50; average annual inflation ≈ 3.9 %
C. CPI after 5 years ≈ 145.00; average annual inflation ≈ 4.0 %
D. CPI after 5 years ≈ 150.12; average annual inflation ≈ 4.5 %
Correct Answer
A
Correct Option:
CPI after 5 years ≈ 147.34; average annual inflation ≈ 4.2 %

About This Question

This is Neco 2025 Economics Question 13. It is one of the objective questions from the 2025 Neco Economics examination.

Difficulty level: Medium .

View More Neco 2025 Economics Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support