Table 2 The table below pertains to lowan, an economy in...

Table 2 The table below pertains to lowan, an economy in which the typical consumer's basket consists of 4 pounds of pork and 3 bushels of corn. Year Price of Pork Price of Corn 2015 $30 per pound $14 per bushel 2016 $35 per pound $20 per bushel Refer to Table 2. If 2015 is the base year, then the CPI for 2016 was 100.0 123.46 102.8 124.0

Transcript

00:03 Highlights to the problem.

00:05 In this problem we need to find the cpi for 2019.

00:10 The consumer price index, cpi, is equal to ct, which is the cost of market in current interval or year, divided by c node.

00:19 C node is the cost of market in previous year or base year.

00:23 It is given that the current year is 2019 and base year is 2017.

00:29 Now the cost or expenditure in 2017, which is the cost or expenditure, which is the year, base here is the quantity multiply by the price and we need to add this we need to multiply the quantity with the price and then we need to take the summation of these quantities for apple banana cherries and dates when we do that and add that when we multiply the price and quantity and add that for all these products we get the expenditure in 2017 is dollar seven hundred 75 similarly we can calculate the expenditure in 2019 in this case again we need to multiply the price and quantity these amounts and then add them when we do this calculation we get the expenditure in 2019 is 935 therefore the price index for 2019 is the expenditure in 2019 divided by expenditure in 2017.

01:38 When we insert the expenditure for 19 and 17, we get this one and the calculation gives us the cpi for 2019 as 120 .6.

01:51 The second problem says what is the rate inflation between 2018 and 19? rate inflation between 2018 and 19 is equal to the cpi for 2009 minus the cpa for 2018 divided by the cpa for 2018 multiply 100.

02:11 Next again we need to find out what is the price index for 2018.

02:16 First of all we need to find the expenditure in 2018...

Question

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