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Answer :
Based on the given CPI data, a gallon of gas that was priced at $4.10 in April would be expected to be priced at approximately $4.13 in May.
To determine the expected price of a gallon of gas in May based on the CPI data, we can calculate the inflation rate between April and May and apply it to the April price.
The inflation rate can be calculated using the following formula:
Inflation Rate = (CPI in May - CPI in April) / CPI in April
In this case, the CPI in April is 288.66, and the CPI in May is 291.47. Plugging these values into the formula:
Inflation Rate = (291.47 - 288.66) / 288.66 ≈ 0.0097
The inflation rate is approximately 0.0097, or 0.97%.
To find the expected price of a gallon of gas in May, we can multiply the April price by 1 plus the inflation rate:
Expected Price in May = April Price × (1 + Inflation Rate)
= $4.10 × (1 + 0.0097)
≈ $4.10 × 1.0097
≈ $4.13
Therefore, based on the given CPI data, a gallon of gas that was priced at $4.10 in April would be expected to be priced at approximately $4.13 in May.
It's important to note that this calculation assumes that the change in the CPI accurately reflects the change in the overall price level and that gas prices move in line with the general price level. Other factors, such as supply and demand dynamics specific to the gas market, can also influence actual price changes.
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