Q5. Suppose a basket of goods and services has been selected to calculate the CP
ID: 1161966 • Letter: Q
Question
Q5.
Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $77; in 2013, the basket's cost was $82; and in 2014, the basket's cost was $88. The value of the CPI in 2013 was
114.3 and the inflation rate from 2013 to 2014 was 7.3%.
106.5 and the inflation rate from 2013 to 2014 was 7.3%.
106.5 and the inflation rate from 2013 to 2014 was 14.3%.
114.3 and the inflation rate from 2013 to 2014 was 14.3%.
a.114.3 and the inflation rate from 2013 to 2014 was 7.3%.
b.106.5 and the inflation rate from 2013 to 2014 was 7.3%.
c.106.5 and the inflation rate from 2013 to 2014 was 14.3%.
d.114.3 and the inflation rate from 2013 to 2014 was 14.3%.
Explanation / Answer
The value of the CPI in 2013 was
=basket cost in 2013/basket cost in 2012*100
=82/77*100
=106.5
the inflation rate from 2013 to 2014
=88/82-1
=7.3%
the above is answer....
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