Question

The Data of Macroeconomics-End of Chapter Problem Abby consumes only apples. In year 1, red apples cost $1 each, green apples cost $2 each, and Abby buys 10 red apples. In year 2, red apples cost $2 each, green apples cost $I each, and Abby buys 10 green apples. Assume that year 1 is the base year in which the consumer basket is fixed. a. Compute the CPI for apples for each year. Assume that year 1 is the base year in which the consumer basket is fixed. How does your index change from year 1 to year 2? The CPI for year 1 is: The CPI for year 2 is: CPI has b. Compute Abby's nominal spending on apples in each year. How does it change from year 1 to year 2? Nominal Spending in year 1: S Nominal spending in year 2: Nominal spending has c. Using year 1 as the base year, compute Abby's real spending on apples in each year. How does it change from year 1 to year 2? Real spending in year 1: S Real spending in year 2: s Real spending has

Need help, please show work. Options for each blank are (doubles, stayed the same, or fallen by half). EXCEPT, the options for the blank at E are (increased, decreased, or stays the same).

Answer 1

I x 0 X (00