Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: • 20 pizzas, $10 each • rent of apartment, $600 per month • gasoline and car maintenance, $100 per month • phone service (basic service plus 10 long-distance calls), $50 per month in the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $640, gasoline and maintenance have risen to $120, and phone service has dropped in price to $40. instructions: write your responses by rounding the cpi to three decimal places and the rate of inflation to one decimal place.
(a)- find the cpi in the subsequent year and the rate of inflation between the base year and the subsequent year. cpi: rate of inflation: %
(b)- the family’s nominal income rose by 5 percent between the base year and the subsequent year. are they worse off or better off in terms of what their income is able to buy? the family is .