Question

2. In 2016; the cost of a market basket of goods was $2,000. In 2018, the cost of the same market basket of goods was

$2,100. Use the price index formula to calculate the price index for 2018 if 2016 is the base year. Show your work. 2
pts

Answer 1

105

Step-by-step explanation:

base year = 2016

cost of market basket of goods in base year = $2,000

CPI for base year = 100

year 2018

cost of market basket of goods in 2018 = $2,100

CPI for 2018 = (cost of basket of goods in 2018 / cost of basket of goods in base year) x 100 = ($2,100 / $2,000) x 100 = 105