Question

1. Which of the following is included in the core inflation index calculation?

A. electrical energy prices

B. food prices

C. clothing prices

2. In the table below there are three years of a basket of retail goods. From this information calculate the price index of 1990 if the base year in 1985? (Round your answer to the nearest whole number.)

Good	Amount	1980	1985	1990
Apples	25	$0.15	$0.25	$0.55
Bananas	5	$1.50	$2.23	$2.95
Pears	1	$1.00	$1.25	$1.50

A. 100

B. 66

C. 160

3. Given the table above, what is the price index for 2012, with 2013 as the base year having a price index of 100 (round your answer to the nearest whole number).

Items	Quantity in Basket	2012 Price	2013 Price
Coffee	8	$4.00	$4.50
Tea	4	$2.00	$2.25
Soda	6	$1.25	$1.50

A. 100

B. 88

C. 114

Answer 1

Answer (1) both electricity and food prices are the main goods in order to calculate the core inflation index but if we have to choose either one then the price if food is very essential to measure the core inflation index

Answer (B) food prices