17) If the CPI basket of goods cost $200 in the reference base period and $450 in a later year, the CPI in the later year equals A) 225. B) 300. C) 250. D) 450. 2016 2017 Item Quantity Price Quantity Price Books 10 $30 8 $50 Pens 20 $1 15 $2

Question

Julianne West

Business

9 August, 06:03

17) If the CPI basket of goods cost $200 in the reference base period and $450 in a later year, the CPI in the later year equals A) 225. B) 300. C) 250. D) 450. 2016 2017 Item Quantity Price Quantity Price Books 10 $30 8 $50 Pens 20 $1 15 $2

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Arthur Caldwell · Answer 1

A) 225

CPI base year = $200

CPI later year = $450

CPI for the later year = ($450 / $200) x 100 = 225

2016 2017

Item Quantity Price Quantity Price

Books 10 $30 8 $50

Pens 20 $1 15 $2

Nominal GDP 2016 = (10 x $30) + ($20 x $1) = $300 + $20 = $320

Nominal GDP 2017 = (8 x $50) + ($15 x $2) = $400 + $30 = $430

Real GDP 2017 using 2016 as base year = (8 x $30) + ($15 x $1) = $240 + $15 = $255