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QUESTION:

Use the following table to answer the question. The table shows the prices and the quantities consumed in Vegetarian Country. Suppose the base year is 2020. Also, suppose that 2020 is the year the typical consumption basket was determined, so the quantities consumed in 2020 are the only quantities needed to calculate the CPI in each year.

YearPrice of CarrotsQuantity of CarrotsPrice of CeleryQuantity of Celery
2020$2.00100$1.00100
2021  2.50  90  0.90120
2022  2.75105  1.00130

What is the inflation rate for 2021?

ANSWER:


Inflation Rate in 2021=113.3−100100×100=13.3100×100=13.3%\text{Inflation Rate in 2021} = \frac{113.3 - 100}{100} \times 100 = \frac{13.3}{100} \times 100 = 13.3\%

Final Answer:

d. 13.3


Posted by Cleveland on September 9, 2024
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