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-(Table: Peanut Butter and Jelly)Use Table: Peanut Butter and Jelly.Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly.If 2012 is the base year,what is the rate of inflation between 2012 and 2013?

Question

Use the following to answer questions: 
-(Table: Peanut Butter and Jelly)Use Table: Peanut Butter and Jelly.Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly.If 2012 is the base year,what is the rate of inflation between 2012 and 2013?

Quizplus · Accepted Answer

The rate of inflation is calculated as the percentage change in the price of a basket of goods and services over time. In this case, the market basket consists of 20 jars of peanut butter and 10 jars of jelly. The total cost of the market basket in 2012 is $20 x $1.00 + $10 x $0.50 = $30.00. The total cost of the market basket in 2013 is $20 x $1.10 + $10 x $0.55 = $33.00. The rate of inflation between 2012 and 2013 is therefore ($33.00 - $30.00) / $30.00 x 100% = 11.25%.

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