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Henry is an economist and wants to understand the relationship between inflation and consumer spending habits. For his research, he needs
the Consumer Price Index for 2014 and the inflation rate. Based on the prices of goods given, what will he find to be the CPI and inflation rate for
2014? Assume that a consumer's basket for three consecutive years consists of the following
Number of Apples
Number of Oranges
Year
Price of an Apple
Price of an Orange
Consumed
Consumed
2012
2
2013
3
3
3
2
2014
2
4
Consider 2012 to be the base year
5
1
5
2
ОА
OB
100 CPI, 49.56 percent inflation
165 CPI, 45.40 percent inflation
185 CPI, 55.35 percent inflation
Ос
OD
175 CPI, 60.56 percent inflation
125 CPI, 50.60 percent inflation
OE
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Answers: 1
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