Please answer in detail b. Covid 19 pandemic has force the people in the economy Love & Laughter, to consumeonly 2 goods, food and clothing. The CPI is derived from the market basket of goods whichconsists of 25 units of food and 5 units of clothing.FOODClothing2018 price per unit2019 price per unit$8$12$20$40(i).What are the percentage increases in the price of food and in the price of clothing?(ii).What is the percentage increase in the CPI?(iii).Do these price changes affect all consumers to the same extent? Explain.

Inflation refers to an increase in the general price level in an economy over a period of time. It…

b. Covid 19 pandemic has force the people in the economy Love & Laughter, to consume only 2 goods, food and clothing. The CPI is derived from the market basket of goods which consists of 25 units of food and 5 units of clothing. Clothing $20 FOOD 2018 price per unit 2019 price per unit $8 $12 $40 (i). What are the percentage increases in the price of food and in the price of clothing? ii). ii). What is the percentage increase in the CPI? Do these price changes affect all consumers to the same extent? Explain.

b. Covid 19 pandemic has force the people in the economy Love & Laughter, to consume only 2 goods, food and clothing. The CPI is derived from the market basket of goods which consists of 25 units of food and 5 units of clothing. Clothing $20 FOOD 2018 price per unit 2019 price per unit $8 $12 $40 (i). What are the percentage increases in the price of food and in the price of clothing? ii). ii). What is the percentage increase in the CPI? Do these price changes affect all consumers to the same extent? Explain.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Measuring The Cost Of Living

Section: Chapter Questions

Problem 5PA

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Please answer in detail

b. Covid 19 pandemic has force the people in the economy Love & Laughter, to consume
only 2 goods, food and clothing. The CPI is derived from the market basket of goods which
consists of 25 units of food and 5 units of clothing.
FOOD
Clothing
2018 price per unit
2019 price per unit
$8
$12
$20
$40
(i).
What are the percentage increases in the price of food and in the price of clothing?
(ii).
What is the percentage increase in the CPI?
(iii).
Do these price changes affect all consumers to the same extent? Explain.

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