Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade. Each month her parents buy 27 pounds of pasta, 69 packages of yogurt, and 17 bottles of lemonade. These three items make up a basket of goods and services similar to the much larger basket used by the Bureau of Labor Statistics (BLS) when computing the official Consumer Price Index (CPI). The table below lists the average price for each item in this basket for the past four years. Hanna's Meals Pasta (dollars Yogurt (dollars per Lemonade (dollars per Year per pound) $1.86 package) bottle) 1. $1.04 $2.22 1.99 1.11 2.38 3 2.13 1.19 2.55 41 2.28 1.27 2.73 Instructions: Round your answers to 2 decimal places. a. For each year, calculate the CPI, using year 1 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the CPI was b. For each year, calculate the CPI, using year 3 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the CPI was
Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade. Each month her parents buy 27 pounds of pasta, 69 packages of yogurt, and 17 bottles of lemonade. These three items make up a basket of goods and services similar to the much larger basket used by the Bureau of Labor Statistics (BLS) when computing the official Consumer Price Index (CPI). The table below lists the average price for each item in this basket for the past four years. Hanna's Meals Pasta (dollars Yogurt (dollars per Lemonade (dollars per Year per pound) $1.86 package) bottle) 1. $1.04 $2.22 1.99 1.11 2.38 3 2.13 1.19 2.55 41 2.28 1.27 2.73 Instructions: Round your answers to 2 decimal places. a. For each year, calculate the CPI, using year 1 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the CPI was b. For each year, calculate the CPI, using year 3 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the CPI was
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter6: Macroeconomic Measurements, Part I: Prices And Unemployment
Section: Chapter Questions
Problem 14QP
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Consumer price index calculates the average price of consumer basket of good and services in the market. it is used to calculate the inflation in the economy.
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