Question: Explain each questions Inflation: *When calculating price index, the quantity gets locked in and the only variable that changes is the price. That's why the

Explain each questions

Inflation: *When calculating price index, the quantity gets locked in and the only variable that changes is the price. That's why the table only has one column for quantity and multiple columns for prices during different years. Base Year Quantity Base Year Price Spending in Base Year 1 Spending Year 2 Price in Year 1 Price Spending in Year 2 Year Whole 30 $5.00 $7.00 $9.00 pizza DVD 40 $6.00 $5.00 $4.00 6-pack of 60 $1.50 $2.00 $2.50 soda Total -- -- 1. What is the total cost of buying all the items in Year 2? 2. What is the CPI (consumer price index) for Year 2? 3. What is the percentage increase in prices from the base year to Year 2? 4. In August 2000 the CPI was 172.8, and in August 2001 the CPI was 177.50.What was the percentage change in prices for this 12-month period?

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