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University of the West Department of Business Administration BUS 202 Principles of Macroeconomics Homework 3 (Chapter 6) Answer Keys Total: 17+4 Points Part 1. Handout page 127: Chapter Quick Quiz (12 Points) 1. c 2. b 3. d 4. a 5. d 6. d Part 2. Handout page 129, Problems and Applications 3b. What is the percentage change in the overall price level? (5 Points) The cost of the market basket in 2017 is (100 x $2) + (100 x $4) + (200 x $1) = $800. The cost of the market basket in 2018 is (100 x $2) + (100 x $6) + (200 x $2) = $1,200. Using 2017 as the base year, we can compute the CPI in each year:
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