Question

8. Suppose the CPI was 108 in 1967, and suppose one must spend $936 today to obtain the same basket of goods and services that could be bought for $200 in 1967. Then today's CPl is a. 410.10. b. 433.33. c. 468.00 d. 505.44.

please calculate question 8

please explain question 10

And please help me do question 5
Thank you very much?

Answer 1

CPI in 1967 = 108 Price = $ 200 Price in 2018 = $ 936 CPI in 2018 = ? Therefore if CPI = 108: Price = $ 200 Therefore if CPI = 100: Price = ? 108/100 times Price = 200 Therefore Price = 200 times 100/108 = 20000/108 = 185.185 Therefore CPI (2018) = n times 100 Therefore n = 936/185.185 = 5.0544 Therefore Today's CPI = 5.05 times 100 = 505.44 Today's CPI = 505.44 Option (D) is correct: 505.44 The correct answer is (a) i.e both interest rates and price of trucks rise. This is because if interest rates line, cost of borrowing rises and if prices of trucks line the lost rises. So, living costs will force them to change their decision. \r\n National savings = Public saving + Private saving = (T - G) + (Y - T + TR - C) T = taxes G = Govt. expenditure Y = GDP/1 income C = consumption Tr = Transfers