Answered step by step
Verified Expert Solution
Question
1 Approved Answer
the three questions below (1-3) are independant 1. the market basket used to calculate the cpi in abc is 8 breads, 12 gallons of milk,
the three questions below (1-3) are independant
1. the market basket used to calculate the cpi in abc is 8 breads, 12 gallons of milk, 4 shirts and 4 pairs of pants. in 2019, bread cost 1.00$ per loaf, milk cost 1.50$ per gallon, shirts cost 6.00$ each, and pants cost 10.00$ per pair. in 2020, bread cost 1.50$ per loaf, milk cost 2.00$ per gallon, shirts cost 7.00$ each, and pants cost 12.00$ per pair. using 2019 as the base year. calculate ABC's inflation rate in 2020?
2. mohamed was a doctor in 1980 and earned 400,000$ that year. his daughter, maya is a doctor today and she earned 450,000$ in 2020. the price index was 99 in 1980 and 150 in 2020
-estimate mohamad's 1980 income in 2020 dollars
- estimate maya's 2020 income in 1980 dollars
- in real terms, calculate the percentage of maya's income compared to mohamad's income
3. suppose world oil prices rise by 150 percent. the price increase causes inventors to look at alternative sources of fuel for internal- comustion engines. a hydrogen-powered engine is developed which is cheaper to operate than gasoline engines. explain which problems in the construction of the CPI does this situation represent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started