In Bovania,cattle Compose 48% of the Consumer Price Index (CPI),housing

question 149

Multiple Choice

In Bovania,cattle compose 48% of the consumer price index (CPI) ,housing composes 32%,and entertainment accounts for the remaining 20%.If,in a certain year,the price of cattle rises by 30% and the price of housing rises by 25%,then:

• A) the value of the CPI must rise, no matter what happens to the price of entertainment, because two-thirds of the CPI is more expensive.
• B) the CPI has increased as long as the price of entertainment does not fall by more than 55%.
• C) the CPI has increased, even if the entertainment in the next year is free.
• D) the CPI has decreased if the price of entertainment falls by more than 27.5%.
• E) it is not possible to tell what would happen to the CPI because it is certain that the goods included in the CPI must change.

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