The following table shows the consumption categories used to compute the consumer price index in a hypothetical economy,their weights as percentages in a typical consumer's total expenditure,and the price ratios relative to the base year.
a)Calculate the consumer price index in Year 1 and Year 2.
b)Calculate the inflation rate in Year 1 and Year 2.
c)Explain how the weights in column 2 were determined.Discuss the meaning of "Price of food."
Definitions:
Discharged By Frustration
A contract termination because an unforeseen event makes contractual obligations impossible to perform or drastically changes the party's principal purpose for entering into the contract.
Anticipatory Breach
An indication that one party intends not to fulfil their contractual obligations before the time of performance is due.
Freak Airplane Accident
An unusual and unexpected airplane incident resulting in damage or injury.
Contract Frustration
A legal concept that occurs when unforeseen circumstances prevent the fulfillment of a contract, thus releasing the parties from their contractual obligations.
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