Statistics Canada Calculates Separate Subindexes of the CPI for Goods

question 41

Essay

Statistics Canada calculates separate subindexes of the CPI for goods and for services. The goods index rose from 96.8 to 112.0 over a 10-year period. During the same period, the services index rose from 95.2 to 115.1.
a) How much did representative goods worth $1,000 at the beginning cost at the end of the 10-year period?
b) How much did representative services worth $1,000 at the beginning cost at the end of the 10-year period?
c) What is the difference between the percent increase in the price level of services and the percent increase in the price level of goods during the decade?

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Definitions:

Physiocrats

A group of 18th-century economists who believed that the wealth of nations was derived solely from the value of land agriculture or land-based products.

Wealth

A measure of the value of all the assets of worth owned by a person, community, company, or country.

Land

The solid surface of the earth that is not covered by water, or the property and natural resources found on it, often considered in terms of ownership and use.

Voltaire

An influential French Enlightenment writer, historian, and philosopher known for his wit, his criticism of Christianity, and his advocacy of freedom of speech and religion.