A-LevelEconomicsThe macroeconomy9708/12 · Oct/Nov 2011 · Q241 Mark

The average consumer divides his expenditure between food, clothing, accommodation and transport in the ratio 2:1:4:3. During the course of a year, the price of food falls by 2%, the price of clothing increases by 4%, the price of accommodation increases by 10% and the price of transport remains constant. Assuming that the weights of a price index reflect the expenditure of the average consumer, what is the increase in the index over the year?

A2.5%

B4%

C10%

D12%

✓ Correct answer

B: 4%

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2011 Paper 1 Variant 2, question 24.

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