Question

Suppose a basket of goods and services has been selected to calculate the cpi and 2004 has been selected as the base year. in 2002, the basket's cost was $50; in 2004, the basket's cost was $52; and in 2006, the basket's cost was $54.60. the value of the cpi in 2006 was

Answer 1

104

Step-by-step explanation:

CPI is the consumer price index. It is a measure of changes in prices level in an economy. CPI is used to indicate the inflate rate in a country.

The formula for calculating the CPI is as follows.

CPI = current basket prices/ base year basket price x 100

In this case.

CPI = 52/50 x 100

CPI =1.04 x 100

CPI = 104