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A small economy produced and consumed goods A and B in 2021 and 2022 in the amounts shown in the table below. Assume that the
A small economy produced and consumed goods A and B in 2021 and 2022 in the amounts shown in the table below. Assume that the market basket for the CPI is defined in the base year. Good A Good B Quantity Price Quantity Price 2021 20 $50 50 $8 2022 40 $75 100 $12 A. Using 2021 as the base year, what is the CPI in each year? B. Using 2021 as the base year, what is the inflation rate in 2022? Challenge C. Using 2022 as the base year, what is the CPI in each year? D. Using 2022 as the base year, what is the inflation rate in 2022
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