Example question calculating CPI and inflation
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Khan Academy
Example question calculating CPI and inflation
The Consumer Price Index (CPI) is a measure of the average change in prices of a typical basket of goods and services over time. It is used to gauge inflation and changes in the cost of living. The CPI might overstate changes in the cost of living because it doesn't always account for how people adjust their spending when prices change.
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1. Calculating inflation using a simple price indexConsider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute.The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022.The cost of each good in the basket as well as the basket's total cost are given for 2020.Perform these same calculations for 2021 and 2022, and enter the results in the following
1. Calculating inflation using a simple price indexConsider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute.The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022.The cost of each good in the basket as well as the basket's total cost are given for 2020.Perform these same calculations for 2021 and 2022, and enter the results in the following
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