The market basket used to calculate the CPI in Aquilonia is four loaves of bread,six litres of milk,two shirts,and two pairs of pants.Last year,the price of bread was $1.00 per loaf,the price of milk was $1.50 per litre,the price of a shirt was $6.00,and the price of a pair of pants was $10.00.This year,the price of bread is $1.75 per loaf,the price of milk is $2.25 per litre,the price of a shirt is $7.50,and the price of a pair of pants is $13.00.What is the inflation rate,as measured by the CPI,for Aquilonia between last year and this year?

Question

Quizplus · Accepted Answer

The cost of the market basket last year was $49.00, and this year it is $67.00. The inflation rate is calculated as ((67 - 49) / 49) * 100 = 36.73%, which rounds to 36.67%.

The Market Basket Used to Calculate the CPI in Aquilonia