This lesson covers Topics 2.4-2.5 in the AP Syllabus. Today we will study inflation.
Assignments
Read: Krugman (Modules 14 and 15)
Watch: The video lecture for today's topic (linked above).
Optional: The videos linked below.
Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day
Suppose that the residents of Vegetopia spend all of their income on cauliflower, broccoli and carrots. In 2008, they buy 100 heads of cauliflower for $200, 50 bunches of broccoli for $75, and 500 carrots for $100. In 2009, they buy 75 heads of cauliflower for $225, 80 bunches of broccoli for $120, and 500 carrots $100.
Calculate the price of each vegetable in each year.
Using 2008 as the base year, calculate the CPI for each year.
What is the inflation rate in 2009?