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Measuring the Economy 1


Problems

Problem : What does the CPI measure?


Problem :

Figure %: Goods and Services Consumed in Country C

Using the figure above, compute the CPI for Country C in year 1 using year 1 as the base year.


Problem : Using figure 1, compute the CPI for Country C in year 2 using year 1 as the base year.


Problem : What is the percent increase in the price level in Country C from year 1 to year 2?


Problem : What are 3 problems with CPI?