In a simple economy, people consume only two goods: food and clothing. The market basket of...
In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 30 units of food and 12 units of clothing.
|
Food |
Clothing |
|
|
Last year’s price |
$ 10 |
$ 12 |
|
This year’s price |
$ 14 |
$ 15 |
|
|
a) What are the percentage increases in the price of food? b) What are the percentage increases in the price of clothing? |
|
|
|
c) What is the percentage increase in the CPI? |
|
Homework Answers
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In a simple economy, people consume only two goods: food
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