Year 2016 Year 2017 Year 2018 Price Quantity Price Quantity Price Quantity Slime 6. 50 9. 60 10 56 Sticky tact Stinky egg |Teddy Bear Tortoise 2 100 2 105 120 4 60 4 50 60 10 30 11 26 12 24 8. 40 11 39 12 36 (a) By using the above data, compute the Laspeyres Price Index for year 2018 by using year 2016 as base year. (b) Interpret your answer in part (a)). (c) By using the above data, compute the Paasche Price Index for year 2018 by using year 2016 as base year. (d) Which item has experienced the greatest inflation rate from year 2017 to year 2018? (Just state your answer, no calculation is needed in part (d)).

Year 2016 Year 2017 Year 2018 Price Quantity Price Quantity Price Quantity Slime 6. 50 9. 60 10 56 Sticky tact Stinky egg |Teddy Bear Tortoise 2 100 2 105 120 4 60 4 50 60 10 30 11 26 12 24 8. 40 11 39 12 36 (a) By using the above data, compute the Laspeyres Price Index for year 2018 by using year 2016 as base year. (b) Interpret your answer in part (a)). (c) By using the above data, compute the Paasche Price Index for year 2018 by using year 2016 as base year. (d) Which item has experienced the greatest inflation rate from year 2017 to year 2018? (Just state your answer, no calculation is needed in part (d)).

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Tracking The U.s. Economy

Section: Chapter Questions

Problem 4.8P

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