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Suppose the market basket consists of 100X, 200Y, and 300Z. Current-year prices are $5 for each unit of X, $2 for each unit of Y, and $3 for each unit of Z. Base-year prices are $2 for each unit of X, Y, and Z. What is the approximate CPI in the current year

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anthougo

The approximate CPI given the prices of the market basket of goods and services in the current year versus the base year is 150%.

What is Consumer Price Index (CPI)?

The CPI is a measurement of the overall cost of the goods and services bought by a typical consumer, using a market basket of goods and services.

The CPI gauges the inflation rate in a fiscal period.

Data and Calculations:

Market basket                     100X         200Y         300Z

Current-year prices               $5             $2              $3

Total current-year prices  $500         $400          $900  = $1,800

                                      (100 x $5)    (200 x $2)  (300 x $3)

Base-year prices                   $2             $2              $2

Total base-year prices     $200         $400          $600 = $1,200

                                      (100 x $2)    (200 x $2)  (300 x $2)

CPI for the current year = 1.5 or 150% ($1,800/$1,200)

Thus, the approximate CPI given the prices of the market basket of goods and services in the current year versus the base year is 150%.

Learn more about the Consumer Price Index (CPI) at https://brainly.com/question/8416975

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