Suppose that a hypothetical “consumer market basket” consists only of Goods B and C, in the quantity: B = 10 and C = 6. As in question #1, use 2021 as a base year (i.e., 2021 = 100). Year 2020 Year 2021 Year 2022 Quantity of Good A 10 12 14 Price of Good A $0.50 $1.00 $1.50 Quantity of Good B
- Suppose that a hypothetical “consumer market basket” consists only of Goods B and C, in the quantity: B = 10 and C = 6. As in question #1, use 2021 as a base year (i.e., 2021 = 100).
Year 2020 Year 2021 Year 2022
Quantity of Good A 10 12 14
Price of Good A $0.50 $1.00 $1.50
Quantity of Good B 3 6 9
Price of Good B $1.00 $2.00 $3.00
Quantity of Good C 20 20 20
Price of Good C $0.25 $0.25 $0.25
- If an individual’s nominal income rises 50%, what is the growth rate of their real income?
- If the base year was updated to 2022, what would be the CPI values for 2021 and 2022?
- With the “updated” CPI values from question “e”, will the inflation rate for 2021 to 2022 change, or stay the same?
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