Answers26-27 Ignite Financial Literacy Personal Finance - EL3403Inflation and Purchasing PowerQuestion 7
7
QuizMultiple Choice

Inflation and Purchasing Power

Question 7 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

The prices of consumer goods do not always exactly follow the CPI. The following chart shows several consumer items, along with their respective prices in 1983 and today.ItemPrice in 1983 ($)Current Price ($)Pair of boots67.45126.85Hair dryer15.2529.95Box of tissues1.152.25Toaster22.8544.25Using the prices shown on this chart, which of the following is a reasonable estimate of the current CPI?

Answer
A
208
B
195
C
180
D
173

Explanation

Add the 1983 prices to get $106.70, and add the current prices to get $203.30. The current prices are about $203.30 ÷ $106.70 × 100 ≈ 190.5% of the 1983 prices. The closest choice is 195, a reasonable estimate of the current CPI.

AI-written and checked against the verified answer.

Previous
Next

More from this Course

Quiz
32 verified answers

Travel Expenses

Quiz
29 verified answers

Auto Insurance

Quiz
28 verified answers

Health Insurance