Table 11-2
The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 3 pounds of pork and 4 bushels of corn. $$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Price of } \
\text { pork }
\end{array} & \begin{array} { c }
\text { Price of } \
\text { Corn }
\end{array} \
\hline 2008 & \$ 20 \text { per pound } & \$ 12 \text { per bushed } \
\hline 2009 & \$ 25 \text { per pound } & \$ 18 \text { per bushed } \
\hline
\end{array}$$
-Refer to Table 11-2. If 2009 is the base year, then the inflation rate in 2009 was

Question

Table 11-2
The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 3 pounds of pork and 4 bushels of corn. $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Price of } \
\text { pork }
\end{array} & \begin{array} { c } 
\text { Price of } \
\text { Corn }
\end{array} \
\hline 2008 & \$ 20 \text { per pound } & \$ 12 \text { per bushed } \
\hline 2009 & \$ 25 \text { per pound } & \$ 18 \text { per bushed } \
\hline
\end{array}$$
-Refer to Table 11-2. If 2009 is the base year, then the inflation rate in 2009 was

Quizplus · Accepted Answer

To calculate the inflation rate in 2009:
1. Calculate the cost of the basket in the base year (2009):
3 lb of pork x $25 per pound = $75
4 bushels of corn x $18 per bushel = $72
Total cost of basket = $147
2. Calculate the cost of the same basket in the current year (2009):
3 lb of pork x $20 per pound = $60
4 bushels of corn x $12 per bushel = $48
Total cost of basket = $108
3. Calculate the inflation rate:
[(Current year basket cost - Base year basket cost) / Base year basket cost] x 100%
[($108 - $147) / $147] x 100% = -26.5%
However, since 2009 is the base year, we need to flip the signs to get the inflation rate:
26.5% becomes 36.1%.

Table 11-2 the Table Below Pertains to Iowan, an Economy

Table 11-2
the Table Below Pertains to Iowan, an Economy