(a)[2]
Using Table 1.1, calculate the percentage rise in prices in the US between April 2015 and January 2016.
(b)[2]
Using examples, explain why the products used to calculate the CPI are assigned weights.
(c)[2]
Explain why the DPI is more likely to be used in the future to measure the rate of inflation.
(d)[4]
Explain how changes in supply might be the cause of a fall in the price of computers at a greater rate than the CPI. Use a diagram to support your answer.
(e)[4]
Explain the implications of inflation for borrowers and savers.
(f)[6]
Discuss whether monetary policy can operate effectively if inflation is measured inaccurately.