Answer to Question #92222 in Macroeconomics for Vha ero

Question

bought in 2010. The average household spent $60 on juice and $30 on cloth in 2009 when the price of juice was $2 a bottle and the price of cloth was $5 a meter. In the current year, 2010, juice is $4 a bottle and cloth is $6 a meter.
Calculate
a. CPI per basket [3] and
b. the inflation rate[3].

Answer 1

A. The CPI per basket is 173.3 Determined as {(30*4+6*6)/90}*100

B. 73.3% determined as (173.30-100)