Suppose the basket of goods used for a Canadian university student price index consists of 2 terms of full-time study and 4 textbooks. Prices of the goods by year are as follows: Year Full-time tuition for Price of One one term Textbook 2018 $3,605 $115 2019 $3,631 $139 2020 $3,924 $189 a) Using 2018 as the base year, compute the university student price index for 2018, 2019 and 2020, and the inflation rate between 2018 and 2019, and between 2019 and 2020. b) Suppose that all university textbooks were produced in the United States. Would Canada's GDP Deflator increase more, less or the same rate as the student price index (based only on these two goods)?

Suppose the basket of goods used for a Canadian university student price index consists of 2 terms of full-time study and 4 textbooks. Prices of the goods by year are as follows: Year Full-time tuition for Price of One one term Textbook 2018 $3,605 $115 2019 $3,631 $139 2020 $3,924 $189 a) Using 2018 as the base year, compute the university student price index for 2018, 2019 and 2020, and the inflation rate between 2018 and 2019, and between 2019 and 2020. b) Suppose that all university textbooks were produced in the United States. Would Canada's GDP Deflator increase more, less or the same rate as the student price index (based only on these two goods)?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...

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