Government survey takers determine that typical family expenditures each month in the year designated as the...

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Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: 25 pizzas at $10 each Apartment rent, $600 per month Gasoline and car maintenance, $100 Phone service (basic service plus 10 long-distance calls), $50 In the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $700, gasoline and maintenance have risen to $120, and phone service has dropped in price to $40. a) Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year. Instructions: Remember to multiply your CPI values by 100 and express the rate of inflation as a percentage. BOTH answers should be rounded to 1 decimal place. CPI is 116.3 Rate of inflation is 16.3 %. b) The family's nominal income rose by 5 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy? The family is worse off Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: 25 pizzas at $10 each Apartment rent, $600 per month Gasoline and car maintenance, $100 Phone service (basic service plus 10 long-distance calls), $50 In the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $700, gasoline and maintenance have risen to $120, and phone service has dropped in price to $40. a) Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year. Instructions: Remember to multiply your CPI values by 100 and express the rate of inflation as a percentage. BOTH answers should be rounded to 1 decimal place. CPI is 116.3 Rate of inflation is 16.3 %. b) The family's nominal income rose by 5 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy? The family is worse off

Answer rating: 100% (QA)

1 Cost of basket in base year 2510 600 100 50 1000 Cost of basket next y... View the full answer