Concept explainers
The U.S. Bureau of Labor Statistics collects and analyzes data related to economic and social issues important to the American public’s interests. Salina, an economist for the bureau, is working on a project involving the consumer price index (CPI), a value indicating the change in the price of a defined set of goods and services over time. She’s examining the CPI and its trends over the past decade to see it it’s possible to predict future CPI values.
Facts
Salina has assembled data about the consumer price index over the past ten years.
See Table 1.
Table 1 | |
Consumer Pirce Index 2005-2014 | |
Year | CPI |
2005 | 195.3 |
2006 | 201.6 |
2007 | 207.34 |
2008 | 215.3 |
2009 | 214.54 |
2010 | 218.06 |
2011 | 224.94 |
2012 | 229.59 |
2013 | 232.96 |
2014 | 236.74 |
Source: U.S. Bureau of Labor Statistics
4. Salina uses the equation she found to approximate the CPI for two future years if trends continue. How much will the set of goods and services purchases for $236.74 in 2014 cost in 2016? How much will it cost in 2020?
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