SOLUTION: The Consumer Price Index (CPI) is calculated by the U.S. Department of Labor. It is a measure of the relative price of a typical market basket of goods in the given year. The perce
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-> SOLUTION: The Consumer Price Index (CPI) is calculated by the U.S. Department of Labor. It is a measure of the relative price of a typical market basket of goods in the given year. The perce
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Question 1118552: The Consumer Price Index (CPI) is calculated by the U.S. Department of Labor. It is a measure of the relative price of a typical market basket of goods in the given year. The percentage increase in the CPI from one year to the next gives one measure of the annual rate of inflation. The following table shows the CPI in December of the given year. Here, C represents the Consumer Price Index, and t is the time in years since December 2005.
t 0 1 2 3 4 5 6 7
C 196.8 201.8 210.0 210.2 215.9 219.2 225.7 229.6
In the figure on the left, we have plotted the data, and in the figure on the right, we have added the trend line, which is given by
C = 4.55t + 197.72.
You can put this solution on YOUR website! Nice description and the data points (t,C) can be plotted. Choose whichever data you believe would give best slope. Does the result match the 4.55 found in the given equation?
The data in Excel lets you see a plotting of points approximately close to a line. The first and last point seem to be good fit on their own for this line.
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