1-Suppose the initial BLS survey (2000), used to measure CPI shows that the CPI basket has 3 Medical and 20 foods. The initial base period prices are, Medical 20 each and food $2 cach. Next suppose that the BLS survey taken in 2011 reveals that the price of Medial cost is $35 and the price of foods is $4. A-Calculate the cost of the CPI basket in 20007 B-Calculate the cost of the CPI basket in 2011? C-Calculate the inflation rate in that period?

1-Suppose the initial BLS survey (2000), used to measure CPI shows that the CPI basket has 3 Medical and 20 foods. The initial base period prices are, Medical 20 each and food $2 cach. Next suppose that the BLS survey taken in 2011 reveals that the price of Medial cost is $35 and the price of foods is $4. A-Calculate the cost of the CPI basket in 20007 B-Calculate the cost of the CPI basket in 2011? C-Calculate the inflation rate in that period?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 5SCQ: How to Measure Changes in the Cost of Living introduced a number of different price indices. Which...

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