Economics 11th Edition by William McEachern

Exercise 2

Consumer Price Index Calculate a new consumer price index for the data in Exhibit 5 in this chapter. Assume that current-year prices of Twinkies, fuel oil, and cable TV are $1.50/package, $3.15/gallon, and $25.00/month, respectively. Calculate the current year's cost of the market basket and the value of the current year's price index. What is this year's percentage change in the price level compared to the base year?