posted by John on .
Assume that the mix of goods in a basket is kept constant for long periods. If
the price of one good rises very rapidly over several years, what will happen to
the relative importance of the other goods in the basket? Is this a problem?
If the price of coffee increases, we get a positive rate of inflation, even if no
other price rises. Is this really inflation? Explain.
I was doing a 5 part problem and these 2 parts stumped me.