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In Bovania, cattle compose 48 percent of the consumer price index (CPI), housing composes 32 percent, and entertainment accounts for the remaining 20 percent. If, in a certain year, the price of cattle
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In Bovania, cattle compose 48 percent of the consumer price index (CPI), housing composes 32 percent, and entertainment accounts for the remaining 20 percent. If, in a certain year, the price of cattle rises by 30 percent and the price of housing rises by 25 percent, then:___________

User Sinetheta
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Answer:

no matter what happens to the price of entertainment, the CPI will still increase.

Step-by-step explanation:

Imagine that year 1 is the base year and the CPI is 100.

Year 2's CPI = (48 x 130%) + (32 x 125%) + $0 entertainment cost = 62.4 + 40 = 102.4

The price of cattle and housing has increased so much, that even if entertainment expenses simply disappear, the CPI will have increased by 2.4%

User Raugaral
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