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Business, 26.10.2019 05:43 nicpinela1234

John smith, a factory worker at an automobile plant in the city detrigan, makes $25 per hour. his dad, larry smith who retired from a plant in the same city ten years back, was earning an average of $10 per hour at the time of retirement. looking at the cpi, john concludes that a factory worker's purchasing power is lower now compared to ten years ago. larry, however, does not agree that purchasing power has fallen. according to him, this conclusion cannot be drawn from such limited data. which of the following, if true, would strengthen larry's claim that the cpi calculations are inconclusive?

a. the inflation rate in detrigan had turned negative 3 years back during a recession.
b. the level of inflation in detrigan is expected to increase following the recent cut in interest rates.
c. the government recently increased the weightage given to food in the cpi to reflect spending patterns.
d. the basket of goods that constitute the cpi is due for its first revision in fifteen years
e. the base year used in the calculation of the price indexes in the country has been revised every two years or so.

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