Economics_Ch11

# 1 consumer price index 180 1889 1722 170 160 1799

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 6-309) EMC Chap 11 EXHIBIT 11/18/05 11-9 8:59 AM Page 303 CPI, 1995 2004 CPI, 1995–2004 200 190 177 1 177.1 Consumer price index 180 188.9 172.2 170 160 179.9 184.0 Taken individually the CPI numbers mean very little. What can you learn by comparing the numbers? 152.4 156 9 156.9 160.5 163.0 1997 1998 166 6 166.6 150 140 130 120 110 100 1995 1996 1999 2000 Years basket is made up of only two goods instead of the hundreds of items that it actually contains. Our market basket will contain 10 CDs and five T-shirts. The total dollar expenditure on the market basket in the base year is found by multiplying the quantity of each good in the market basket (column 1) times the price of that good in the base year (column 2). A look at column 3 shows us that \$130 was spent on CDs and \$20 was spent on T-shirts, for a total dollar expenditure of \$150. Next, the total dollar expenditure on the market basket in the current year is found by multiplying the quantity of each good in the market basket (column 1) times the price of that good in the current year (column 4). A look at column 5 shows us that \$150...
View Full Document

## This document was uploaded on 01/16/2014.

Ask a homework question - tutors are online