Asked by Karen Macauley on Jun 01, 2024
Verified
The nominal price of milk was $2.25 in 1998 while the CPI was 163.0 that year. Also, the CPI in 1970 was 38.8. What was the real value of 1998 milk in terms of 1970 dollars?
Real Value
The value of an object, factoring in the effects of inflation on purchasing power.
CPI (Consumer Price Index)
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate the cost of living.
Nominal Price
The price of a good or service without adjusting for the effects of inflation or deflation, representing its cost in current currency terms.
- Apply CPI data for the assessment and comparison of costs and the power to purchase in different times and geographical areas.
Verified Answer
ZK
Learning Objectives
- Apply CPI data for the assessment and comparison of costs and the power to purchase in different times and geographical areas.