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EC102_-_Ch_6_CPI_Questions__S11

EC102_-_Ch_6_CPI_Questions__S11 - 1 1 ,wheatandkiwifruit...

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9e66582cffb2d1b42592d9dc34ed2ce49c0246bb.doc 1 1. The data in Table 1 above refer to a small country that produces CDs, wheat and kiwi fruit.  The data in Table 1 provide the quantities of these goods produced in 1990 and 1991 as well  as the prices of these goods in those years. Suppose the average household as defined by Statistics Canada purchases a bundle of  goods consisting of: o 8 CDs o 5 bushels of wheat o 3 pounds of kiwi fruit a) Use this information and the prices from Table 1 to construct a Consumer Price Index for  1991 when the value of the Consumer Price Index in 1990 is 100. b) What is the inflation rate between 1990 and 1991? Table 1 1990 Base year 1991 P Q P Q CDs \$20 8 \$17 12 Wheat \$5 5 \$5.50 10 Kiwi Fruit \$0.75 3 \$1 7 2. If the CPI this year is 175.2 and next year the CPI is 176.1, what was the inflation rate over  the year? 3.

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EC102_-_Ch_6_CPI_Questions__S11 - 1 1 ,wheatandkiwifruit...

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