Table 5.12
-Refer to Table 5.12.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2011 is the base year, then what is the CPI for 2015?
A)40.08
B)100
C)180
D)208
E)251

Question

Table 5.12 
-Refer to Table 5.12.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2011 is the base year, then what is the CPI for 2015?
A)40.08 
B)100 
C)180 
D)208 
E)251

Quizplus · Accepted Answer

The Consumer Price Index (CPI) for a given year is calculated by taking the current year's market basket cost and dividing it by the base year's market basket cost, then multiplying by 100. Given 2011 is the base year, the CPI for 2015 reflects how much more or less expensive the market basket has become since 2011. Without the specific numbers from Table 5.12, we can't calculate the exact CPI value, but the correct process involves comparing the cost of the basket in 2015 to that in 2011. The answer provided (208) suggests that the cost of the basket in 2015 is 208% of the cost in 2011, indicating significant inflation since the base year.

Table 5.12 -Refer to Table 5.12.Suppose an Economy Has Only Three Goods