Last month, the year-on-year (YoY) CPI inflation rate was 5%. This month, the CPI falls by 0.2% relative to last month.
Which of the following statements is correct?

Question

Last month, the year-on-year (YoY) CPI inflation rate was 5%. This month, the CPI  falls  by 0.2% relative to last month. 
 Which of the following statements is correct?

Answer

The new YoY inflation rate could be higher than 5% if, in the corresponding month one year earlier, the CPI fell by more than 0.2%.

Answer

The new YoY inflation rate must be lower than 5%, because the CPI fell this month.

Answer

The new YoY inflation rate could be higher than 5% only if, in the corresponding month one year earlier, the CPI increased.

Answer

The new YoY inflation rate must equal 4.8%.

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Last month, the year-on-year (YoY) CPI inflation rate was 5%. This month, the CP...

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