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Bundle
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Explanation of Solution
The bundle price in 2016 can be calculated as follows:
The bundle price in 2016 is $550.
Index in 2016 is calculated as follows:
The index in 2016 is 100.
The bundle price in 2017 can be calculated as follows:
The bundle price in 2017 is $575.
Index in 2017 is calculated as follows:
The index in 2017 is 104.5.
The bundle price in 2018 can be calculated as follows:
The bundle price in 2018 is $562.50.
Index in 2018 is calculated as follows:
The index in 2018 is 102.3.
The percentage change in index between 2016 and 2017 is calculated as follows:
The percentage change in index between 2016 and 2017 is 4.5%.
The percentage change in index between 2017 and 2018 is calculated as follows:
The percentage change in index between 2017 and 2018 is -2.1%.
There was no inflation between 2017 and 2018 as there was a decrease in the price level between 2017 and 2018.
Inflation: Inflation is the situation of abnormal price hike in the economy which leads to the situation of too much money chasing too few goods.
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Chapter 7 Solutions
Principles Of Macroeconomics
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