1945

Direct comparison and choice of an index from the consumer’s standpoint

Imagine an economy that has just two products (wine and bread), with prices in two periods (2013 and 2014) as shown in table I.1. From 2013 to 2014, the price of wine doubles (from US$ 20 to US$ 40), and the price of bread halves (from US$ 20 to US$ 10).

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