22. Suppose a market basket of goods and services costs $440 in the base year and...
Homework Answers
22) The price of the market basket of goods is now $550
Consumer Price Index = Price of market basket / Price of market basket in base year x 100
125 = Price of market basket / 440 x 100
125 x 440 = Price of market basket x100
55000 = Price of market basket x 100
55000 / 100 = Price of market basket
Price of market basket = $550
Hence option C is correct
23) Next year's CPI will equal be 375
Inflation Rate = Next CPI - Current CPI / Current CPI x 100
7.1 = Next CPI - 350/ 350 x 100
7.1 x 350 = (Next CPI - 350) x 100
2485 + 35000 = Next CPI x 100
37485 / 100 = Next CPI
Next CPI = 374.85 or 375
Hence option C is correct
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22. Suppose a market basket of goods and services costs $440
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