Question

Suppose that you were born in 2001. Also, suppose that your mother received a $100 baby shower gift at your birth. How much would it cost to buy a similar amount of goods and services in 2016, given that the CPI was 177.1 in 2001 and 240.0 in 2016?

a. $70.53
b. $100.00
c. $141.78
d. $241.11

Answer 1

$135.52

Step-by-step explanation:

Calculation for How much would it cost to buy a similar amount of goods and services in 2016

Using this formula

Cost to buy similar amount of goods and services in 2016=Amount in 2001x (Price level 2016/Price level 2001)

Let plug in the formula

Cost to buy similar amount of goods and services in 2016=$100*(240.0/177.1)

Cost to buy similar amount of goods and services in 2016=$100*1.3552

Cost to buy similar amount of goods and services in 2016=$135.52

Therefore How much would it cost to buy a similar amount of goods and services in 2016 is $135.52