Question

Consider a simple basket of goods that assumes consumers buy only bread and milk. The basket consists of 3 loaves of

bread and 1 gallon of milk. The prices are shown in the table.
Year Price of a Loaf of Bread Price of a Gallon of Milk
Year 1
$1.50
$2.90
Year 2
$1.65
$3.10
Calculate the CPI to complete the statement. Round your answers to two decimal places, if necessary.
The CPI for year 2 is *blank 1*
, and the rate of inflation from year 1 to year 2 is *blank 2*
Submit

Answer 1

The CPI for year is 108.78, and the rate of inflation from year 1 to year 2 is 8.78%.

Explanation:

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