Table 1 Year CPI 2011 2012 2013 2014 221.08 227.66 231.31 234.93 Use Table 1 to
ID: 1154375 • Letter: T
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Table 1 Year CPI 2011 2012 2013 2014 221.08 227.66 231.31 234.93 Use Table 1 to answer questions 13 and 14. 13. Between 2013 and 2014, the inflation rate was closest to a. 3.6% b. 1.6% c. 1.5% d. 36%. e. None of the above. 14. In 1948 the CPI was 23.4. Also in 1948, the price of a Coke was 5 cents. If the price of Coke rose at the same rate as the CPI, in 2014 the Coke would cost: a. 45 cents b. 50 cents e. $1.75, d. $2.00 e. None of the above. 15. The Luddites were a. Angry about technological change that displaced workers b. Angry about inflation that caused a devaluation of workers' savings. e. Angry about unemployment caused by seasonal changes in British coal mining. d. Angry that GDP did not count the value of Don-market production activities. e. Angry that the standard of living in Great Britain had remained unchanged during their lifetime 16 . I a fictional economy. sim e the base year the CPI has experienced 8% and then 15% annual inflation. The value of the CPI is closest toExplanation / Answer
Question 13
CPI in 2013 = 231.31
CPI in 2014 = 234.93
Calculate the inflation rate -
Inflation rate = [(CPI in 2014 - CPI in 2013)/CPI in 2013] * 100 = [(234.93 - 231.31)/231.31] * 100
Inflation rate = 1.56% or 1.6%
So,
Between 2013 and 2014, the inflation rate was closest to 1.6%.
Hence, the correct answer is the option (b).
Question 14
CPI in 1948 = 23.4
CPI in 2014 = 234.93
Price of coke in 1948 = 5 cents
Calculate the price of coke in 2014 -
Price in 2014 = Price in 1948 * (CPI in 2014/CPI in 1948) = 5 cents * (234.93/23.4) = 50 cents
In 2014, the coke would cost 50 cents.
Hence, the correct answer is the option (b).
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