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Take 2014 as the price index base year. That year, you paid $80 for a day at a theme park. In 2015, the price was up to $84. Assuming that the increase reflects the inflation rate and that this rate continues in 2016, match each number to its description. (1)the 2016 price index: 110.25, (2)the 2015 price index: 105, (3) the inflation rate as a percentage: 5, (4) the cost of a theme park visit in 2016 dollars: 88.20

Respuesta :

saqib097

Answer:

Following is the solution to this problem:

The inflation rate as a percentage:

=(4/80)*100

=5%

The cost of a theme park visit in 2016 dollars:

[tex]80(1+0.05)^{2}[/tex]

[tex]80(1.05)^{2}[/tex]

=88.20

The 2015 Price Index:

Consumer Price Index Formula = [tex]\frac{Cost of Market Basket in a Given Year}{Cost of Market at Base Year} * 100[/tex]

=(84/80)*100

=105

The 2016 Price Index:

=(88.2/80)*100

=110.25

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