« previous next »

Author Question: The tables above give the purchases of an average consumer in a small economy. (These consumers ... (Read 105 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
on: Jun 29, 2018
The tables above give the purchases of an average consumer in a small economy. (These consumers purchase only shampoo and pizza.) Suppose 2015 is the reference base period.
 
  a) What is the cost of the CPI basket in 2015 and 2016?
  b) What is the CPI in 2015 and in 2016?
  c) What is the inflation rate between 2015 and 2016?

Question 2

If the base year CPI basket costs 250 and next year the CPI basket costs 275, what is next year's CPI?
 
  What will be an ideal response?


choc0chan

  • Sr. Member
  • ****
  • Posts: 362
Reply #1 on: Jun 29, 2018
Answer to Question 1

a) For 2015 the CPI basket costs 171.25. For 2016 the CPI basket costs 178.75.
b) For 2015, the base period, the CPI is 100.0. For 2016 the CPI is (178.75/171.25 )  100, which is 104.4.
c) Between the two years the inflation rate is equal to (104.4 - 100.0 )/100  100, which is 4.4 percent.

Answer to Question 2

The CPI equals 100  (275/250 ) = 110.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Killer Whale - Size comparison to an average human. Killer Whale - Size comparison to an average human.
Table 6.1 illustrates the main regime types and their differences. It breaks the regimes into four Table 6.1 illustrates the main regime types and their differences. It breaks the regimes into four
Small Town USA: Struggling to Survive Small Town USA: Struggling to Survive
This battery-powered tester uses light-emitting diodes (LEDs), meter lead terminals, and two small ... This battery-powered tester uses light-emitting diodes (LEDs), meter lead terminals, and two small ...
Vitamins Absorbing in the small intestine Vitamins Absorbing in the small intestine
Video: Neuron structure and function - sensory neurons, association neurons & motor neurons

For a complete list of videos, visit our video library