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Calculate the rate of change in the cost of living


U(x,y)=X(square)Y

Px=$1.60

Py=$8

I=$90

Calculate the rate of change in the cost of living for the consumer using the

A. laspeyeres Index (cpi

B. paasche index (gdp deflator)

C. true index (ideal index)

D. if the consumer's income had increased to I=$96 per period, is the consumer better off or worse off than before?

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Macroeconomics: Calculate the rate of change in the cost of living
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