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Question 33 Flag question Not yet answered Marked out of 15.00 2:03:11 a. Explain the difference and the link between the price level and the rate of inflation. (3 marks) b. Consider a small economy where a typical family consumes only 3 goods. Bread rolls, T-shirts and Books. The price and quantity data of the three products are given in the table below: Product Quantity Base Year Price (2020) Price (2022) Price (2023) Bread rolls 25 $1.00 $1.50 $1.50 T-shirts 6 $5.00 $5..50 $6.50 Books 8 $20.00 $22.00 $25.50 Use the information in the table to calculate the following: (12 marks) i) The total cost of the consumption basket in 2020, 2022 and 2023. (3 marks) ii) Consumer Price Index (CPI) for years 2022 and 2023 that measures the changes in price level relative to the base year. (6 marks) iii) The rate of inflation for 2023. (2 marks) iv) Is 2020 a good year (the year when recession started) to be considered as a base year for this analysis? (1 marks) 2 ABI a