Use the item weights in Figure 7.2 to determine the percentage change in the CPI that would

Question:

Use the item weights in Figure 7.2 to determine the percentage change in the CPI that would result from a

(a) 20 percent increase in entertainment prices.

(b) 8 percent decrease in transportation costs.

Item Entertainment Prices Transportation Costs Clothing Item Weight 0.05 0.175 0.033 Increase/ Decrease in

Insurance and pensions 11.9% Housing 32.8% Entertainment 5.3% Transportation 15.9% Health care 8.1% Source:

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The Macro Economy Today

ISBN: 978-1259291821

14th edition

Authors: Bradley R. Schiller, Karen Gebhardt

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Question Posted: Oct 30, 2023 09:47 AM

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Use the item weights in Figure 7.2 to determine the percentage change in the CPI that would

Question:

Item Entertainment Prices Transportation Costs Clothing Item Weight 0.05 0.175 0.033 Increase/ Decrease in Price 20% -8% 100% CPI Effect 0% -0.01% 196

Step by Step Answer:

a 20 percent increase in entertainment prices The current weight of entertainment in the CPI is 6So ...View the full answer

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