The accompanying table shows a utility company's cost to supply a fixedamount of power to a new housing development; the indices are specific to the utility industry. Assume that year 0 is the base period. Determine the specific inflation for each period and calculate the average inflation rate over the three year period. Year                           cost 0                                $624.000 1                                $638.400 2                                 $677,000 3                                 $729,500

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 3.7P
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The accompanying table shows a utility company's cost to supply a fixed
amount of power to a new housing development; the indices are specific to the utility industry. Assume that year 0 is the base period. Determine the specific inflation for each period and calculate the average inflation rate over the three year period.

Year                           cost

0                                $624.000

1                                $638.400

2                                 $677,000

3                                 $729,500

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