Ask Question
BusinessBusiness
24 April, 12:49

In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base yeara. What is the CPI for 2009? b. What is the CPI for 2010? c. What is the inflation rate for 2010?

+4
Answers (1)
  1. 24 April, 13:06
    0
    The answers are:

    The CPI for 2009 is 100 (since it is the base year) The CPI for 2010 is 129.17 The inflation rate for 2010 is 29.17%

    Explanation:

    CPI basket for 2009

    6 razors x $20 per razor = $120 4 bottles of cologne x $30 per bottle = $120

    The total value of the CPI basket for 2009 is $240

    CPI basket for 2010

    6 razors x $25 per razor = $150 4 bottles of cologne x $40 per bottle = $160

    The total value of the CPI basket for 2010 is $310

    The CPI for 2009 is 100, since it is the base year The CPI for 2010 = (CPI basket 2010 / CPI basket 2009) x 100 = ($310 / $240) x 100 = 129.17 The inflation rate for 2010 = [ (CPI basket 2010 / CPI basket 2009) - 1] x 100 = (1.2917 - 1) x 100% = 29.17%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
This is another name for the factor that might trigger an event. Latent cause, Unusual factor, Controllable factor, Proximate cause
Answers (1)
One difference between advertising and sale promotion is that sales promotion offers blank
Answers (1)
A higher level of interest income can be received if a savings account offers a promotional rate. True False
Answers (1)
A company reported net income of $6 million. During the year the average number of common shares outstanding was 3 million. The price of a share of common stock at the end of the year was $5.
Answers (1)
In 2013, Emma purchased an automobile, which she uses for both business and personal purposes. Although Emma does not keep records as to operating expenses (e. g.
Answers (1)
New Questions in Business
A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of a.
Answers (1)
What is a diversionary incentive? a. a temptation to switch trading partners to get a better deal b. an opportunity to change international agreements while other states are preoccupied with a conflict c. a payoff for avoiding war d.
Answers (1)
A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month. True or False?
Answers (1)
Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually. It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.
Answers (1)
Why does unoka consult the oracle? what does the oracle tell him?
Answers (1)
Home » Business » In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010.
Sign Up Forgot Password?