Question Suppose that the representative consumer in Country ABC buys 4 units of each consumer good and the prices of each good are: Consumer Good 2019 2020 2021 X NAX Y $5 $5 7.5 8 358 $4 7 a) What is the cost of a typical basket of consumer goods for 2019, 2020, and 2021? b) Convert the cost of each bundle into a CPI using 2019 as the base year. c) What is the inflation rate for 2020 and 2021?

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Inflation
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QUESTION FIVE
Question
Suppose that the representative consumer in Country ABC buys 4 units of each consumer good and the
prices of each good are:
Consumer Good 2019 2020 2021
$4 $5 $5
7
7.5 8
358
X
Y
Z
a) What is the cost of a typical basket of consumer goods for 2019, 2020, and 2021?
b) Convert the cost of each bundle into a CPI using 2019 as the base year.
c) What is the inflation rate for 2020 and 2021?
Transcribed Image Text:QUESTION FIVE Question Suppose that the representative consumer in Country ABC buys 4 units of each consumer good and the prices of each good are: Consumer Good 2019 2020 2021 $4 $5 $5 7 7.5 8 358 X Y Z a) What is the cost of a typical basket of consumer goods for 2019, 2020, and 2021? b) Convert the cost of each bundle into a CPI using 2019 as the base year. c) What is the inflation rate for 2020 and 2021?
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