Given the following information about a simple three-good economy,what would be the approximate 2007 consumer price index using a 2000 base year?

A)50
B)200
C)222
D)302

Question

Given the following information about a simple three-good economy,what would be the approximate 2007 consumer price index using a 2000 base year?

A)50 
B)200 
C)222 
D)302

Quizplus · Accepted Answer

In order to calculate the consumer price index, we need to know the current prices and quantities of the goods, as well as the prices and quantities of the goods in the base year. Since this information is not provided in the question, it is impossible to calculate the consumer price index exactly.

However, we can make an educated guess based on the options provided. The consumer price index compares the cost of a basket of goods in the current year to the cost of the same basket of goods in the base year. Therefore, the consumer price index will be greater than 100 if the cost of the basket of goods has increased since the base year.

Looking at the options provided, option C)222 is the only one greater than 100, which suggests that we should select this option as the best choice.

Given the Following Information About a Simple Three-Good Economy,what Would