Answered step by step
Verified Expert Solution
Link Copied!

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,

image text in transcribed
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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

13th Edition

9780470374948, 470423684, 470374942, 978-0470423684

More Books

Students also viewed these Accounting questions