In 1997, the price of a particular basket of goods was $2,900. In 1998, the price of the same basket was $3,300. In 1996, the base year, the price of the basket was $2,500. (Hint: price index is price indexed to a base year.)

Question

A. Calculate price index for 1996, 1997, and 1998.

B. Calculate inflation rates for 1996-97 and 1997-98. Is inflation increasing or decreasing

Answer 1

http://www.classroom.synonym.com/calculate-consumer-price-index-2821.html

http://www.inflationdata.com/inflation/Inflation_Articles/CalculateInflation.asp

As to whether inflation is increasing or decreasing, if the cost of the same basket of goods costs more than the year before, and more again in the next year, do you think the rate of inflation is going up or down?

Answer 2

Economic