How much can a dollar buy? The buying power of a dollar changes over time. The Bureau of Labor Statistics measures the cost of a “market basket” of goods and services to compile its Consumer Price Index (CPI). If the CPI is 120, goods and services that cost $100 in the base period now cost $120. Here are the average values of the CPI for the years between 1970 and 2006. The base period is the years 1982 to 1984.

Year CPI Year CPI Year CPI 1970 38.8 1984 103.9 1998 163.0 1972 41.8 1986 109.6 2000 172.2 1974 49.3 1988 118.3 2002 179.9 1976 56.9 1990 130.7 2004 188.9 1978 65.2 1992 140.3 2006 201.6 1980 82.4 1994 148.2 1982 96.5 1996 156.9

(a) Make a graph that shows how the CPI has changed over time.

(b) What was the overall trend in prices during this period? Were there any years in which this trend was reversed?

(c) In which years were prices rising fastest, in terms of percentage increase?

In what period were they rising slowest?