Solve

Question 3. Assume a small economy, which consumes only karaoke machine and CDs. The basket for the typical consumer is fixed at 1 karaoke machine and 3 CDs. Karaoke machine CD Price Price 2014 $40 $10 2015 $60 $12 a) Using 2014 as the base year, compute the consumer price index for 2014 and 2015. b) Compute the inflation rate for 2015