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In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI has 75 units of food and 20 units of clothing.2002 price for food =$5 clothing = $122003 price for food =$7 and clothing = $18
(a) what are the percentage increases in the price of food and in the price of clothing?
(b) What is the percentage increase in the CPI?
(c) Do these price changes affect all consumers to the same extent? Explain in two to three sentences.
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