Economics Fall 17-DReppas Shamma alhosani 11/23/17 10:51 Pr Quiz: Chapter 22 CYU

Question

Economics Fall 17-DReppas Shamma alhosani 11/23/17 10:51 Pr Quiz: Chapter 22 CYU Assignment Time Remaining: 01:07:26 Submit Qu 13 of 15 (10 complete) 1 This Quiz: 17 pts possi his Question: 1 pt A typical family on Sandy Island consumes only juice and clot. Last year, which was the base year, the family spent $15 on juice and $12 on cloth. In the base year juice was S5 a bottle and cloth was $6 a length. (You can use this information to calculate the quantity of juice and cloth in the basket.) This year, juice is $8 a bottle and cloth is $5 a length. > Answer to 1 decimal place. The CPI in the current year is The inflation rate in the current year ispercent. Enter your answer in each of the answer boxes.

Explanation / Answer

Value of market basket in the base year = 15 + 12 = $27

Bottles of juice consumed = 15/5 = 3

Length of cloth consumed = 12/6 = 2 units

Value of market basket in the present year = 8 x 3 + 5 x 2 = $34

CPI base year = 100

CPI current year = 100 x Value of market basket in the present year / Value of market basket in the base year

CPI current year = 125.9

Inflation rate = CPI current year/CPI base year - 1 = 25.9%

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