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 26CTQ: Describe a situation, either a government policy situation, an economic problem, or a private sector...
Related questions
Question
![.ull T-Mobile ? *
2:21 AM
@ O 5% 4
A myopenmath.com
How to calculate the inflation
rate for food, 1913-2021
Start with the inflation rate formula:
CPI in 2021/CPI in 1913 * 1913 USD value = 2021
USD value
Then plug in historical CPI values from above. The
CPI for Food was 9.923 in the year 1913 and
270.938 in 2021:
270.938/9.923 * $20 = $546.08
Therefore, according to the U.S. Bureau of Labor
Statistics, $20 in 1913 has the same "purchasing
power" as $546.08 in 2021 (in the CPI category of
food).
Use the highlighted info above to answer each question
below. Round appropriately to the context.
a. The absolute change in the cost of food from 1913
to 2021 was | 261.01
2$
Calculation: 261.015
b. The rate of change in the cost of food from 1913 to
2021 was
$/year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8070a33b-8bef-4b70-9058-ab592d9ccdd8%2F369e409b-a72c-4175-82e6-2a4bfa3598d1%2Frvvuooo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:.ull T-Mobile ? *
2:21 AM
@ O 5% 4
A myopenmath.com
How to calculate the inflation
rate for food, 1913-2021
Start with the inflation rate formula:
CPI in 2021/CPI in 1913 * 1913 USD value = 2021
USD value
Then plug in historical CPI values from above. The
CPI for Food was 9.923 in the year 1913 and
270.938 in 2021:
270.938/9.923 * $20 = $546.08
Therefore, according to the U.S. Bureau of Labor
Statistics, $20 in 1913 has the same "purchasing
power" as $546.08 in 2021 (in the CPI category of
food).
Use the highlighted info above to answer each question
below. Round appropriately to the context.
a. The absolute change in the cost of food from 1913
to 2021 was | 261.01
2$
Calculation: 261.015
b. The rate of change in the cost of food from 1913 to
2021 was
$/year
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