Evaluate the change in costs over the period in real terms

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Suppose industry abatement costs rise from $850 million in 2004 to $1,000 million in 2005 in nominal terms and that the CPI is 100 in 2004 and 106 in 2005.

a. Evaluate the change in costs over the period in real terms, first in 2004 dollars and then in 2005 dollars.

b. Are your answers the same? Explain why or why not.

Reference no: EM131107384

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