Consumer purchased the basket of goods

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Question

Assume in year 1, a basket of goods costs $200, and in year 2, the same basket of goods costs $210. Which of the following is true? Without knowing if the consumer purchased the basket of goods, we cannot determine if there has been any change in prices. If the goods in year 2 are better than the goods from year 1, the inflation rate exceeds 5 percent. The simple rate of inflation is 5 percent from year 1 to year 2. There has been deflation of 5 percent from year1 to year 2. The price index will be lower in year 2 than in year 1.

Reference no: EM133629888

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