In a particular nation, people buy a completely unique and different set of goods and services every year. None of the goods purchased in the new year are the same as any of the goods purchased in the previous year. Based on this information thea) relative price of all goods would determine the consumer price index (CPI). b) the consumer price index (CPI) would be meaningless in this nation c) we would know the nation is experiencing deflation. d) we would know the nation is experiencing inflation.

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Lilia

28 April, 02:54

In a particular nation, people buy a completely unique and different set of goods and services every year. None of the goods purchased in the new year are the same as any of the goods purchased in the previous year. Based on this information thea) relative price of all goods would determine the consumer price index (CPI). b) the consumer price index (CPI) would be meaningless in this nation c) we would know the nation is experiencing deflation. d) we would know the nation is experiencing inflation.

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Giovani Peterson · Answer 1

Answer is mentioned below.

A) The relative price of all commodities are meaning less since no old product is re purchased. What exist is only the new year nominal prices. B) True. C) we can't know whether the nation is experiencing deflation d) we can't know whether the nation is experiencing inflation with out any previous price records. What we have is only a new base year every year. All years are new base years.