Econ Se

1. List the three largest categories that make up the merchandise wicket that is used to visualise consumer price index. According to Figure 1 in our textbook, there are many categories that make up the foodstuff basket used to calculate CPI. They are Housing, Transportation, Food and beverages, aesculapian care, Recreation, Education and communication, Apparel, and other. The three largest categories consist of Housing at 43%, Transportation at 17% and Food and beverages at 15%. These three combined make up 65% of the commercialize basket, so majority of the basket includes these three categories. 2. Suppose the market basket of goods and services purchased by an average urban theater consists of only X, Y, Z, three consumer products. Calculate the CPIs for each year and the pretension rate for the course of instruction 1-Year 2 period. There are 5 steps to calculate the CPI. The first is to fix the basket. Then, you find the prices of the items in your basket. Third, you compute the baskets cost. Then, you use the expression: 100x (cost of cost of basket in current year/cost of basket in plant year).

Once you find the CPI, you find inflation using the formula: 100x ((CPI this year-CPI last year)/(CPI last year)) For Year One, to calculate the baskets cost, you would do the legal injury of X times the quantity of X plus the toll of Y times the Quantity of Y plus the determine of Z times the Quantity of Z. (1x2) + (3x1) + (2x3)= 11. Then, enter this number into the formula. Im assuming year one is the base year, so (11/11) x 100= 100. This would be the CPI for Year One. For Year Two, you repeat these steps: (2x2) + (6x1) + (1x3)= 13. Then, you plug this into the formula. (13/11) x 100= 118.18. This is the CPI for Year Two. You then find the inflation rate by plugging the two CPIs into the formula. ((118.18-100)/(100)) x 100= 18.18% or 18% rounded. This direction the inflation rate for the Year One-Year Two point in time is approximately 18 percent. 3. If the CPI was 130.7 in 1990 and was 136.2 in 1991, compute the rate of... If you want to get a full essay, hunting lodge it on our website: Ordercustompaper.com

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