28 A typical family on Sandy Island consumes only juice and cloth. Last year, which was the...

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28 A typical family on Sandy Island consumes only juice and cloth. Last year, which was the reference base year, the family spent €40 on juice and €25 on cloth. Last year, juice was €4 a bottle and cloth was €5 a metre. This year, juice is €4 a bottle and cloth is €6 a metre. Calculate:

a The CPI basket.

b The CPI in the current year.

c The inflation rate in the current year.

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Economics

ISBN: 9781118150122

10th European Edition

Authors: Michael Parkin, Dr Melanie Powell, Prof Kent Matthews

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