Question
1) Suppose CPI increases at a rate of 2% per year, while BRDPI grows at 3% per year. How long, in years, does it take
1) Suppose CPI increases at a rate of 2% per year, while BRDPI grows at 3% per year. How long, in years, does it take for prices to double under
A) CPI? ____ Years
B) BRDPI? ____ Years
2)
Suppose that a hypothetical healthcare inflation index, HCI, is computed by weighting three items as follows: "insurance premiums" is weighted at 1=50%, and "medical products" and "medical services" are each weighted at 2=3=25%. Suppose that insurance premiums are growing at is 4% per year, and the annual inflation rate of medical products and medical services is 1% and 2%, respectively.
What is the annual inflation rate of HCI? (Note: Your answer should be a number in percentage form. Do not enter '%').
Show the work, please.
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