What the price of candy should have been had it followed


Problem

Over a long period of time, the price of candy rises from $0.20 to $1.20. Over the same period, the CPI rose from 150 to 300. Adjusted for the overall inflation, how much did the price of the candy bar change?

Hint: First use the formula on Page 214 to find what $0.20 would have been worth, given the CPI change. Once you have that, let us say $x, then calculate the percentage change as ($1.20 - $x)*100%/$x.

This question is telling us what the price of candy should have been had it followed the overall price change as indicated by CPI, but in reality how much extra did candy prices change.

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Macroeconomics: What the price of candy should have been had it followed
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