Exercise 2.5

The table below presents the average cost for the main five expenditure categories of goods and services forecasted to be consumed in the United Arab Emirates over a period of five years following EXPO 2020.

The expenditure weights, as reported by the Ministry of Economy of the UAE, are as follows:

40% for Category 1, 18% for Category 2, 16% for Category 3, 14% for Category 4, and 12% for Category 5.

*** Note: Marks will be deducted, if you do the calculations for the wrong years.

Calculate the cost of the basket of goods and services consumed in the UAE in each year, whenever applicable.

2021:

2023:

2025:

Compute the level of the UAEs Consumer Price Index in each year, whenever applicable.

2021:

2023:

2025:

Determine the level of inflation in the UAE in each year, whenever applicable.

2021:

2023:

2025:

Category 1 Category 2 Category 3 Category 4 Category 5 Year Price of Price of Price of Price of Price of Accommodation Food Transportation Entertainment Medical Care 2021 790 210 150 190 160 2022 810 230 170 200 180 2023 740 210 180 170 150 2024 760 200 160 210 190 2025 790 220 200 230 210