Suppose That the CPI Basket Contains Only 40 Heads of Cauliflower

question 211

Multiple Choice

Suppose that the CPI basket contains only 40 heads of cauliflower and 60 bunches of broccoli.If the price of cauliflower goes down by $1 per head and the price of broccoli goes up by $1 per bunch,then

• A)the CPI does not change.
• B)the CPI increases.
• C)the CPI decreases.
• D)the CPI might increase or decrease depending how the quantities are affected by the price changes.
• E)There is not enough information to answer this question.

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