What will be the year to year, Personal CPI of this student (or in other words, what will be the percentage increase over the year)?
Does the answer make sense to you? Should it be this small?
Look carefully at the table. Does it fairly represent a typical week in the life of an ISB student? What can we do to fix this table? HINT: think about how much popcorn, ice cream and t-shirts you would buy and how many iPads you would buy.
The CPI for our example is too small because we have a price percentage increase (or decrease which is the Ipad in this case) more than 10%. Our CPI should be much bigger.
Our table doesn’t represent a typical year in the life of an ISB student because perhaps students would buy only ONE Ipad or bike, but certainly more than one t – shirt or popcorn bags with popcorn inside.
That's right :) We don't buy iPads or bikes every week. How could we make up for this mathematically? Is there another way to do the calculation to fairly reflect what we spend our money on?
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