1 Figure 1 shows the trend of Consumer Price Index (CPI) in UK during January 2012 to December 2021 The red dotted line

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1 Figure 1 Shows The Trend Of Consumer Price Index Cpi In Uk During January 2012 To December 2021 The Red Dotted Line 1 (37.88 KiB) Viewed 31 times

1 Figure 1 shows the trend of Consumer Price Index (CPI) in UK during January 2012 to December 2021 The red dotted line is the inflation target of Bank of England (Hint: Inflation targeting is a central bank's strategy of specifying an inflation rate as a goal and adjusting monetary policy to achieve that rate) (Total 25") UK inflation rose to 5.4% Consumer Prices Index 696 5% 5.4% 49 3% han m Bank of England target 29 19 09 -19 Jan '12 Dec '13 Dec '15 Dec '17 Source: Office for National Statistics Dec '19 Dec 21 Figure 1 (1) What is CPI? To what extent do you agree that CPL is a good measure of inflation? (8') (2) If the current CPi in the UK jumped to 3.5%, shall the Bank of England use a contractionary monetary policy or an expansionary monetary policy? Use Phillips curve to explain. (8") (3) Explain why the UK inflation rose to 5.4% by the end of 2021. Do you have any suggestions for the UK government? (9) (25.05))