Question: The table below shows you a sample consumer basket collected by the Bureau of Labor Statistics (BLS) from 2019 to 2022. Items in the CPI
The table below shows you a sample consumer basket collected by the Bureau of Labor Statistics (BLS) from 2019 to 2022.
| Items in the CPI basket | Unit(s) | Price per unit of the goods | |||
| 2019 | 2020 | 2021 | 2022 | ||
| Grocery 1 | 4 | $5.00 | $5.00 | $8.00 | $9.50 |
| Grocery 2 | 5 | $3.00 | $3.50 | $4.50 | $5.00 |
| Clothing | 3 | $18.00 | $18.00 | $20.00 | $22.00 |
| Digital | 2 | $25.00 | $26.00 | $28.00 | $30.00 |
| Health | 1 | $125.00 | $125.00 | $135.00 | $145.00 |
(1) How much is the nominal cost of the basket in 2019, 2020, 2021 and 2022?
(2) Using 2019 as the base year, calculate consumer price index (CPI) in 2020, 2021 and 2022? Note: keep two digits after the decimal.
(3) How much is the inflation rate between 2019 and 2020? And how much is the inflation rate between 2021 and 2022? We assume 2019 is the base year in both cases. Note: keep the growth rates as percentage with two digits after the decimal, for example 5.25%.
(4) Use your own language to explain the major differences between CPI and GDP deflator as the measurement of change of price levels.
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