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27 October, 01:50

Suppose a basket of goods and services has been selected to calculate the CPI and Year 1 has been selected as the base year. In Year 1, the basket's cost was $50; in Year 2, the basket's cost was $52; and in Year 3, the basket's cost was $55. The value of the CPI in Year 3 was

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  1. 27 October, 02:00
    0
    110

    Explanation:

    The consumer price index is an index that measures the inflation rate in a country. It tracks changes in prices for a basket of products and services in a country over time. CPI is calculated with a base year as the reference period.

    The formula for calculating CPI with a base year is as below.

    consumer price index=cost of the market basket in a given year x100

    cost of a market basket at the base

    In this case,

    CPI = $ 55 x 100

    $ 50

    CPI = 1. 1 x 100

    CPI = 110
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Home » Business » Suppose a basket of goods and services has been selected to calculate the CPI and Year 1 has been selected as the base year. In Year 1, the basket's cost was $50; in Year 2, the basket's cost was $52; and in Year 3, the basket's cost was $55.
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