A typical family on Leisure Island buys only take-away meals and clothes.Last year, which was the base year, the family spent

$4040

on take-away meals and

$200200

on clothes. In the base year, a take-away meal was

$44

and clothes were

$1010

per item.This year, a take-away meal is

$55

and clothes are

$4040

per item.Calculatea. The CPI basketb. The CPI this yearc. The real price of a take-away meal this yeard. The inflation rate this year

Certainly! Let's go through each part of the calculation: a. CPI Basket: . The base year expenditure is given as $4040 on take-away meals and $200200 on clothes. . The base year prices are $44 for a take-away meal and $10 for clothes. The CPI basket for the base year is calculated as follows: (Quantitybase year X Pricebase year) + (Quantitybase year X Pricebase year) (4040/44) + (200200/10) 90 + 20020 20110 So, the CPI basket is $20110. b. CPI this year: . The current year expenditure is not provided, but you can calculate it using the new prices. . The current year prices are $55 for a take-away meal and $40 for clothes. The current year expenditure is: (Quantitycurrent year X Price current year) + (Quantitycurrent year X Price current year) (4040/55) + (200200/40) 73.45 + 5005 5078.45 Now, the CPI for this year is calculated by dividing the current year expenditure by the base year expenditure and multiplying by 100: CPI = Expenditure current year Expenditure base year x 100 CPI = ( 5078.45 20110 X 100 CPI ~ 25.26 So, the CPI this year is approximately 25.26. c. Real price of a take-away meal this year: . The real price is calculated by dividing the current year price by the CPI and multiplying by 100: Real Price = Price current year CPI X 100 Real Price = (25.26 ) X 100 Real Price ~ 217.90 So, the real price of a take-away meal this year is approximately $217.90. d. Inflation rate this year: . The inflation rate is calculated by the percentage change in the CPI: Inflation Rate = (Plthis year -PIbase year x 100 CPIbase year Inflation Rate = (25.26-100) 100 X 100 Inflation Rate ~ -74.74% So, the inflation rate this year is approximately -74.74%. Note that it is negative, indicating deflation