Calculate CPI if the price of a good in the current year is $500 and the price of the good in the base year is $200.
Calculate CPI if the price of a good in the current year is $500 and the price of the good in the base year is $200.
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Related questions
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The table shows the Quantity Consumed and the Price of Good
In the exhibit, the citizens of the country come to desire more of good A. As a result, the quantity and price of the good both rise.
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Question 9: CPI
This question relates to Course Learning Objective 2 and is worth 10 points.
Using the table below, compute the consumer price index (CPI) in 2007 using 2006 as the base year. Show all your work.
|
Good |
Quantity |
2006 Price |
2006 Total Expenditure |
2007 Price |
2007 Total Expenditure |
|---|---|---|---|---|---|
|
Bagels |
100 |
$1.00 |
Ā |
$1.50 |
Ā |
|
Shoes |
10 |
$45.00 |
Ā |
$50.00 |
Ā |
|
DVDs |
20 |
$10.00 |
Ā |
$12.00 |
Ā |
Exhibit: Quantity Consumed and Price of Good
Ā
| Ā | Base Year | Later Year |
|---|---|---|
| Price of good A | 100 | 200 |
| Quantity of good A | 100 | 200 |
| Price of good B | 100 | 100 |
| Quantity of good B | 100 | 100 |
Compute the GDP deflator(Paasche index) in the later year. (Input answer in bow in this manner: 2.665. Round up to 3 decimals)
