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  • Worked Problem - Inflation

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    Jazmine Parayno
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    This document contains a worked problem calculating the consumer price index (CPI) and inflation rates for three years - 2018, 2019, and 2020. It provides a table with the prices of three items - bread, shirts, and gasoline - for each year. It then calculates the CPI for each year using 2018 as the base year and indexes it at 100. Finally, it calculates the inflation rates as percentages between the years.

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    This document contains a worked problem calculating the consumer price index (CPI) and inflation rates for three years - 2018, 2019, and 2020. It provides a table with the prices of three items - bread, shirts, and gasoline - for each year. It then calculates the CPI for each year using 2018 as the base year and indexes it at 100. Finally, it calculates the inflation rates as percentages between the years.

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    © All Rights Reserved
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    8 views1 page

    Worked Problem - Inflation

    Uploaded by

    Jazmine Parayno
    This document contains a worked problem calculating the consumer price index (CPI) and inflation rates for three years - 2018, 2019, and 2020. It provides a table with the prices of three items - bread, shirts, and gasoline - for each year. It then calculates the CPI for each year using 2018 as the base year and indexes it at 100. Finally, it calculates the inflation rates as percentages between the years.

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    © All Rights Reserved
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    of 1

    Parayno, Jazmine Reine T.

    BPA-1A

    PRINCIPLES OF ECONOMICS

    Worked Problem

    A. CPI and Inflation Problem

    1. Fill in blanks in table below:

    Year 1 (2018) Year 2 (2019) Year 3 (2020)

    Market Basket Items # of Units Php per unit Total Cost Php per unit Total Cost Php per unit Total Cost

    Bread 2 packs Php50 100 Php55 110 Php58 116

    Shirt 2 pairs Php200 400 Php225 500 Php180 360

    Gasoline 10 gallons Php200 2000 Php250 2500 Php280 2800

    Total Cost of Basket Php450 2500 Php530 3110 Php518 3276

    2. Using year 1 as our base year, using the formula above to calculate the index for each year:

    a. Year 1 Index = (base year) 100


    b. Year 2 Index = 124.4
    c. Year 3 Index = 131. 4

    3. Calculate the inflation rate on a percentage basis for the following:

    a. 2018 to 2019: 24.4%


    b. 2018 to 2020: 31.4%
    c. 2019 to 2020: 5.63%

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