Question: hello, I really dont understand this concept could you please help. The tourist industry is very much interested in understanding how tourists spend money. In

hello, I really dont understand this concept could you please help.

The tourist industry is very much interested in understanding how tourists spend money. In order to measure the price changes in three important components of tourist spending, a statistician calculated the average cost of a hotel room per night, cost of one meal and cost of rental car per day. The results of this are shown below. a) Calculate a simple price index of a rental car per day, taking 1985 as base year. Interpret your answer. (3 marks) b) Calculate the Laspeyres Price Index (LPI) for tourist spending for year 2015. Let 1985 =100. Interpret your answer. (3 marks) 0) Discuss when EgasmgwwlmPrice Index (PPI) method provides accurate changes in price. (1 mark)

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