In 1991, good x cost $5 and good y cost $1. They now cost $9 and $5
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In 1991, good x cost $5 and good y cost $1. They now cost $9 and $5 respectively. In 1991 the consumption bundle of x and y was 4 x’s and 5 y’s. It is now 9 x’s and 7 y’s. Calculate the Laspeyres index of current prices relative to 1991 prices rounded to one decimal place. (Remember the Laspeyres index uses the old quantities for weights.)
0.5 |
2.4 |
2.5 |
2.2 |
None of the above. |
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