(Answered) Answer the following questions about the cppinbspcouch

Economics

Answer the following questions about the CPPI (Couch Potato Price Index)

2014 2015

Good Q P Q P

Beer 4 $5.00 3 $6.00

Chips 8 $2.00 8 $2.50

Cable TV 1 $36.00 2 $32.00

Soda Pop 2 $2.00 1 $2.25

Pizza 5 $11.00 3 $16.00

a) Calculate the inflation rate based on this index, using 2014 as the base year Give answer as a % and round to 2 decimal places.

d) Explain why, based on the figures above, why the inflation figure you calculated in (a) may overstate the impact of higher prices on the consumer. (Not just a generic answer here, be specific from this data).

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