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In the country of Genovia, the typical household buys 2 kg of cream cheese, 4 loaves of bread, and 3 books each week. The prices
In the country of Genovia, the typical household buys 2 kg of cream cheese, 4 loaves of bread, and 3 books each week. The prices of these goods in years 2010, 2011, and 2012 are given in the table below: Year Price of cream Price of a loaf of cheese per kg bread Price of a book 2010 E3 E1 E 10 201 1 E6 ( 2 E 20 2012 E 6 E 3 (25 a. Calculate the CPI in 2010 and 2012, using 2011 as the base year. b. Calculate the rate of inflation between 2010 and 2011. c. Calculate the rate of inflation between 2011 and 2012. d. Describe a reason why the inflation rate between 2011 and 2012 might overstate changes in the cost of living
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