b. The following table shows the price index of various sub-index of CPI in May 2014 and May 2015: 1 2 4 5 8 Item Food Housing Electricity, gas and water Alcohol and tobacco Clothing and footwear Durable goods Miscellaneous goods Transport Miscellaneous services Price Indices in Price Indices in May 2014 May 2015 173.4 158.4 135.7 138.4 110.5 118.4 119.7 136.3 113.8 128.4 156.2 133.3 118.5 109.4 120.5 128.6 134.1 125.9 i. Compute the inflation rate of each item in the table. ii. If your family income is relatively low, do you better of for worse off in May 2015? Explain why.

b. The following table shows the price index of various sub-index of CPI in May 2014 and May 2015: 1 2 4 5 8 Item Food Housing Electricity, gas and water Alcohol and tobacco Clothing and footwear Durable goods Miscellaneous goods Transport Miscellaneous services Price Indices in Price Indices in May 2014 May 2015 173.4 158.4 135.7 138.4 110.5 118.4 119.7 136.3 113.8 128.4 156.2 133.3 118.5 109.4 120.5 128.6 134.1 125.9 i. Compute the inflation rate of each item in the table. ii. If your family income is relatively low, do you better of for worse off in May 2015? Explain why.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Tracking The U.s. Economy

Section: Chapter Questions

Problem 4.9P

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