In a simple economy, people consume only two goods: food and clothing. The market basket of goods

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In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing.

	Food	Clothing
2002 Price per Unit	$4	$10
2003 Price per Unit	$6	$20

a. What are the percentage increases in the price of food and in the price of clothing?

b. What is the percentage increase in the CPI?

c. Do these price changes affect all consumers to the same extent? Explain.

Related Book For answer-question

Principles of Macroeconomics

ISBN: 978-0134078809

12th edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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Posted Date: Jan 11, 2022 02:38 AM

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In a simple economy, people consume only two goods: food and clothing. The market basket of goods

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The consumer price index CPI evaluates the overall cost of a basket or bundle of goods and services ... View the full answer

Principles of Macroeconomics

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