CPI and Inflation Practice Problems #1Fill in blanks in table belowMarket Basket ItemsCheeseBlue JeansGasolineTotal Cost of Basket# of UnitsYear 2 Index =2 lbsYear 3 Index =2 pairs10 gallonsYear 1 Index = (base year)Year 1 (2000)$ per unit Total Cost$1.75 $3.50$12.00 $$1.25 $Using year 1 as our base year, using the formula above to calculate the index for each year:Year 2 (2003)$ per unit Total Cost$1.50 $$15.50 $$1.60 $$Year 3 (2006)$ per unit Total Cost$1.50$$$20.00$2.701108$$

These problems could be solved by using the following formula: Total Cost = $ per unit × # of…

CPI and Inflation Practice Problems #1 Fill in blanks in table below Market Basket Items Cheese Blue Jeans Gasoline Total Cost of Basket # of Units Year 2 Index = 2 lbs Year 3 Index = 2 pairs 10 gallons Year 1 Index = (base year) Using year 1 as our base year, using the formula above to calculate the index for each year: Year 1 (2000) $ per unit Total Cost $1.75 $3.50 $12.00 $ $1.25 $ Year 2 (2003) $ per unit Total Cost $1.50 $ $15.50 $ $1.60 $ Year 3 (2006) $ per unit Total Cost $1.50 $ $20.00 $2.70 $ $ 113

CPI and Inflation Practice Problems #1 Fill in blanks in table below Market Basket Items Cheese Blue Jeans Gasoline Total Cost of Basket # of Units Year 2 Index = 2 lbs Year 3 Index = 2 pairs 10 gallons Year 1 Index = (base year) Using year 1 as our base year, using the formula above to calculate the index for each year: Year 1 (2000) $ per unit Total Cost $1.75 $3.50 $12.00 $ $1.25 $ Year 2 (2003) $ per unit Total Cost $1.50 $ $15.50 $ $1.60 $ Year 3 (2006) $ per unit Total Cost $1.50 $ $20.00 $2.70 $ $ 113

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Unemployment And Inflation

Section: Chapter Questions

Problem 3.7P

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