The following table shows the average retail price of milk and the Consumer Pric
ID: 1256249 • Letter: T
Question
The following table shows the average retail price of milk and the Consumer Price Index from 1980 to 1998.
Year
1980
1985
1990
1995
1998
CPI
100
130.58
158.62
184.95
197.82
Retail price of milk
$1.05
$1.13
$1.39
$1.48
$1.61
Real price of milk in 1980 dollars
Calculate the real price of milk in different years in terms of 1980 dollars by filling out the table above.
Has the real price increased/decreased/stayed the same since 1980?
Year
1980
1985
1990
1995
1998
CPI
100
130.58
158.62
184.95
197.82
Retail price of milk
$1.05
$1.13
$1.39
$1.48
$1.61
Real price of milk in 1980 dollars
Explanation / Answer
Real price of butter in year X = .
1980 1985 1990 1995 1998
1.05 0.87 0.88 0.8 0.82
Since 1980 the real price of butter has decreased
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