In a simple economy,people consume only 2 goods,food and clothing.The market basket of goods used to compute the CPI has 50 units of food and 10 units of clothing.
a.What are the percentage increases in the price of food and in the price of clothing?
b.What is the percentage increase in the CPI?
c.Do these price changes affect all consumers to the same extent? Explain.
Definitions:
Agency
The capacity of individuals to act independently and make their own free choices.
Discouraged
Feeling a lack of confidence or enthusiasm, often as a result of perceived obstacles or failure.
Encouraged
Motivated or inspired to proceed, act, or feel confident in doing something.
Individualistic
Characterized by the prioritization of personal goals and autonomy over group goals and cohesion.
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