Suppose that the residents of Fashionland spend all of their income on dresses, hats and shoes.In 2010, they buy four dresses for $800, five hats for $500 and two pairs of shoes for $400.In 2011 they buy five dresses for $900, five hats for $600 and four pairs of shoes for $600.
a.If the base year is 2010, what is the CPI in both years?
b.What is the inflation rate in 2011?

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The Answer of Suppose that the residents of Fashionland spend all of their income on dresses, hats and shoes.In 2010, they buy four dresses for $800, five hats for $500 and two pairs of shoes for $400.In 2011 they buy five dresses for $900, five hats for $600 and four pairs of shoes for $600.
a.If the base year is 2010, what is the CPI in both years?
b.What is the inflation rate in 2011?

Suppose That the Residents of Fashionland Spend All of Their