Economics_Ch11

# By what percentage did the price of a honda accord

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Unformatted text preview: a Single Price Suppose that in 2004 a Honda Accord was priced at \$20,000, and in 2005 a Honda Accord was \$21,500. By what percentage did the price of a Honda Accord increase? Here is the formula we use to determine the percentage change in price: Percentage change in price Price in later year Price in earlier year Price in earlier year 100 If we fill in the numbers, we get the following: Percentage change in price \$21,500 \$20,000 \$20,000 100 7.5% The Consumer Price Index In the previous example, we found the percentage increase in a single price from one year to the next. Economists are much What is the consumer price index? How is the consumer price index calculated? What is the aggregate demand curve? What is the aggregate supply curve? How do we calculate the unemployment rate? How is the employment rate calculated? Key Terms price index consumer price index (CPI) aggregate demand curve aggregate supply curve unemployment rate employment rate more interested, though, in what happens to prices in general than in what happens to a single price. Before they can calculate th...
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