Consider the following price information: Year 1 Year 2 Cup of Coffee $0.5 $1.00 Glass of Milk. $1.00 $2.00 a. Based on the information given, what was the inflation rate between year 1 and Year 2 b. What happened to the price of coffee relative to that of milk between year 1 and year 2

Consider the following price information: Year 1 Year 2 Cup of Coffee $0.5 $1.00 Glass of Milk. $1.00 $2.00 a. Based on the information given, what was the inflation rate between year 1 and Year 2 b. What happened to the price of coffee relative to that of milk between year 1 and year 2

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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Question

Consider the following price information:

Year 1 Year 2

Cup of Coffee $0.5 $1.00

Glass of Milk. $1.00 $2.00

a. Based on the information given, what was the inflation rate between year 1 and Year 2

b. What happened to the price of coffee relative to that of milk between year 1 and year 2

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