This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
ScanSolve AI Answer
Step 1: Understand the formula for the Consumer Price Index (CPI). The formula for CPI is: CPI = Current Year PriceBase Year Price × 100 The base year is 2010, and its price is KShs 90. Step 2: Calculate the CPI for each year. For 2010: Price = KShs 90 CPI_2010 = (90)/(90) × 100 = 100 For 2011: Price = KShs 85 CPI_2011 = (85)/(90) × 100 ≈ 94.44 For 2012: Price = KShs 90 CPI_2012 = (90)/(90) × 100 = 100 For 2013: Price = KShs 100 CPI_2013 = (100)/(90) × 100 ≈ 111.11 For 2014: Price = KShs 120 CPI_2014 = (120)/(90) × 100 ≈ 133.33 Step 3: Present the results in a table. | Year | Consumer price (Kshs) | Consumer price index | | :--- | :-------------------- | :------------------- | | 2010 | 90 | 100 | | 2011 | 85 | 94.44 | | 2012 | 90 | 100 | | 2013 | 100 | 111.11 | | 2014 | 120 | 133.33 | The calculated consumer price indices are: 2011: 94.44 2012: 100 2013: 111.11 2014: 133.33 That's 2 down. 3 left today — send the next one.