The table below shows the cost of a fixed basket of goods that a typical urban c

Question

The table below shows the cost of a fixed basket of goods that a typical urban consumer would buy in the economy of Kindleberger, where the base period for the consumer price index (CPI) is the year 2000. The year for which you are determing the CPl is considered the current year. Please specify your answers to two decimal places Year 2000 2011 2012 Cost of a basket of goods $8150.00 $8500.00 $4725.00 What is the CPI for 2000? Number What is the CPI for 2011? Number What is the CPI for 2012? Number

Explanation / Answer

The CPI for any year is given as CPI=(cost of basket of goods in current year/cost of basket of goods in base year)*100. THe base year in present case is 2000.

Thus CPI for 2000 is CPI=(8150/8150)*100=100

CPI for 20011 is CPI=(8500/8150)*1000=104.29

CPI for 20012 is CPI=(4725/8150)*100=57.97

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