Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows:

10 pizzas at $12 each

Rent of apartment, $750 per month

Gasoline, car insurance, and maintenance, $150

Phone service (basic service plus 10 long-distance calls), $50

In the year following the base year, the survey takers determine that pizzas have risen to $15 each, apartment rent is $810, gasoline, car insurance, and maintenance have risen to $170, and phone service has dropped in price to $40.

a)Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year.

Instructions: Round your CPI answer to 3 decimal places and Rate of inflation to 1 decimal place.

b)The family's nominal income rose by 10 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy?