If the CPI in year one is 112 and in year 2 it is 118, we can say that consumer prices rose by about blank . During the inflationary period if a worker received a 3% pay raise when the inflation rate was 7%, it means that the worker’s real wage fell by . Similarly for the economy, if the price level rose by 4% and the nominal output rose by 9%, then the economy’s real output has risen by . If the price of housing (which accounts for 40% of total expenditures in the CPI basket) also rose by 4% while the prices of all the other goods in the CPI basket remained constant, then the CPI would have risen by .
If the
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