Question

Please answer the following. The following is information about spending on goods in the economy Year...

Please answer the following.

The following is information about spending on goods in the economy

Year

Iced Tea Price

Iced Tea Quantity

Coffee Price

Coffee quantity

2010

5

6

3

10

2012

6

4

2

12

2015

4

5

5

8

Suppose the government believes that a consumer will always buy 4 ice teas and 9 coffees each year. What is the consumer price index for each year according to the government? (2)

Using 2012 as a base year, what is inflation between the years? (2)

What are some issues with using the CPI? (1)

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