Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 11 - Measuring the Cost of Living - Questions For Review - Page 231: 1

Answer

A 10% increase in the price of chicken will greatly affect the consumer price index vs a 10% increase in the price of caviar because chicken makes up a large percent of the average persons market basket.

Work Step by Step

This tests your knowledge of what a market basket is and how it reflects your typical urban consumer so determine what a typical person would buy because caviar is more of a luxury than a commonly consumed product.
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