« previous next »

Author Question: The tables above give the purchases of an average consumer in a small economy. (These consumers ... (Read 107 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?

The lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

Did you know?

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

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Digestion and absorption of emulsified fat in the small intestine. Digestion and absorption of emulsified fat in the small intestine.
Approximately 1 pound (0.45 kg) of ground elk meat formed into patties; note the relatively small fa Approximately 1 pound (0.45 kg) of ground elk meat formed into patties; note the relatively small fa
Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to
The Importance in the World Fossil Fuel Economy The Importance in the World Fossil Fuel Economy
How to find the average value of a function (Part 2) How to find the average value of a function (Part 2)
Average Number of Days per Year with Thunderstorms Average Number of Days per Year with Thunderstorms
Video: Muscle cell structures - actin, myosin and titin filaments

For a complete list of videos, visit our video library