Base answers on Table 1. Nominal Prices and CPI Item Gasoline (average for all grades) Whole...

 

Transcribed Image Text:

Base answers on Table 1. Nominal Prices and CPI Item Gasoline (average for all grades) Whole milk Consumer Price Index 1995 $1.24/gallon $2.96/gallon 152.4 Table. 1. Nominal Prices and CPI 2022 $3.36/gallon $4.21/gallon 296.8 Real Price in $1995 a. (2 pts.) Based on the Consumer Price Index in Table 1, what was the change in the average price level (inflation) between 1995 and 2022? Show your calculation and report your answer in the table above as a percentage. Notice that this is the inflation that occurred over 27 years, not an annual rate. b. (4 pts.) Calculate the real price of gasoline and the real price of milk in 2022 based on the 1995 prices and the CPI data shown. Enter the results on Table 1. (1995 is the base year.) This is what we would have paid in 2022 had the commodity price adjusted at exactly the rate of inflation as measured by the percent change in the CPI. Base answers on Table 1. Nominal Prices and CPI Item Gasoline (average for all grades) Whole milk Consumer Price Index 1995 $1.24/gallon $2.96/gallon 152.4 Table. 1. Nominal Prices and CPI 2022 $3.36/gallon $4.21/gallon 296.8 Real Price in $1995 a. (2 pts.) Based on the Consumer Price Index in Table 1, what was the change in the average price level (inflation) between 1995 and 2022? Show your calculation and report your answer in the table above as a percentage. Notice that this is the inflation that occurred over 27 years, not an annual rate. b. (4 pts.) Calculate the real price of gasoline and the real price of milk in 2022 based on the 1995 prices and the CPI data shown. Enter the results on Table 1. (1995 is the base year.) This is what we would have paid in 2022 had the commodity price adjusted at exactly the rate of inflation as measured by the percent change in the CPI.

Answer rating: 100% (QA)

a To calculate the change in the average price level inflation between 1995 and 2022 we can ... View the full answer