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(a) In 1985 the price of a new desk top computer was $1,600. The 1985 CPI...

(a) In 1985 the price of a new desk top computer was $1,600. The 1985 CPI is 107.6. The 2019 CPI is 255.7.

Based on this information and using the Real Value Equation from the Chapter Seven Lectures, determine the real price of that computer in 2019 dollars. Show how you got your answer.

(b) When you say the real value in 2019 dollars is your answer for (a) above, what does that really tell us? Use your answer in (a) above in your answer here.

(c) Calculate the Inflation Rate from 1985 to 2019 to the second decimal point. Show how you got your answer.

(d) In one factual sentence without any opinion, state what your answer in (c) above tells us. Use your answer in (c) above in your answer here.

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