News release Real consumption expenditure in 2002 chained dollars was $814.2 billion in 2009 and $841.5 billion in 2010. In current dollars, it was $898.2 billion in 2009 and $940.6 billion in 2011. ...

News release

Real consumption expenditure in 2002 chained

dollars was $814.2 billion in 2009 and $841.5

billion in 2010. In current dollars, it was $898.2

billion in 2009 and $940.6 billion in 2011.

Source: Statistics Canada

a. Calculate the chained price index for consumption (CPIC) for 2009 and 2010.

b. Calculate the CPIC inflation rate for 2010.

c. Why might the CPIC inflation rate be preferred to the CPI inflation rate?

d. Did real consumption expenditure increase by

more or by less than nominal consumption

expenditure? Why?

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