"In 2002, Annie, an 80-year-old, is telling her granddaughter Suzie about the good old days. She says that in 1932, when she was a child, you could buy a nice house for $15,000 and a jacket for $5. Suzie looks up some current prices and finds that a house that costs $200,000 and a jacket that costs $50 are today's equivalent of the ones that Annie says cost so little when she was a child. Suzie, an economics student, looks up the CPI for 1932 and discovers that it is 13.7. The reference base is 1982-1984. The CPI for 2002 is 180.3. "
I came up with this for the inflation rate:
From 1932 - base year, inflation rose 86.3%
From 1932 - 2002, inflation rose 1216%
Is that right or did I do something wrong? I need to find out what the lower cost was for those years.
2007-02-23
15:10:11
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1 answers
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asked by
ohok
2
in
Economics