Formula Consumer Price Index: CPI=(Price of the Market Basket in Year X)/(Price of the Market Basket in Base Year) x 100 1.Calculate CPI: Year Prices CPI (Base year: 2012) CPI (Base year: 2013) CPI (Base year: 2014) 2012 $20 100 2013 $40 2. 2014 $50 3. Formula Inflation Rate (Change in Price Level):%Δ PL=(CPI (new)-CPI (old))/(CPI (old)) x 100 Calculate the rate of inflation between Year 1 and Year 2. The price index (CPI) in Year 1 was 124.0. It was 130.7 in Year 2. If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately: A) 5 percent. B) 9 percent. C) 3 percent. D) 2 percent.
Formula Consumer Price Index: CPI=(Price of the Market Basket in Year X)/(Price of the Market Basket in Base Year) x 100 1.Calculate CPI: Year Prices CPI (Base year: 2012) CPI (Base year: 2013) CPI (Base year: 2014) 2012 $20 100 2013 $40 2. 2014 $50 3. Formula Inflation Rate (Change in Price Level):%Δ PL=(CPI (new)-CPI (old))/(CPI (old)) x 100 Calculate the rate of inflation between Year 1 and Year 2. The price index (CPI) in Year 1 was 124.0. It was 130.7 in Year 2. If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately: A) 5 percent. B) 9 percent. C) 3 percent. D) 2 percent.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Formula
CPI=(Price of the Market Basket in Year X)/(Price of the Market Basket in Base Year) x 100
1.Calculate CPI:
|
Year |
Prices |
CPI (Base year: 2012) |
CPI (Base year: 2013) |
CPI (Base year: 2014) |
|
2012 |
$20 |
|
|
|
|
2013 |
$40 |
|
2. |
|
|
2014 |
$50 |
|
|
3. |
Formula Inflation Rate (Change in Price Level):%Δ PL=(CPI (new)-CPI (old))/(CPI (old)) x 100
- Calculate the rate of inflation between Year 1 and Year 2. The price index (CPI) in Year 1 was 124.0. It was 130.7 in Year 2.
- If the consumer price index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately:
- A) 5 percent.
- B) 9 percent.
- C) 3 percent.
- D) 2 percent.
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