The price of a quart of milk rises from $1.00 to $1.20 and the price of a T-shirt rises from $8.00 to $9.60. If the CPI rises from 150 to 195, then people likely will buy more milk and more T-shirts.
CPI stands for the Consumer Price Index. It is a measurement of the median alteration over time in the prices that are paid by municipality consumers for a market handbasket of consumer commodities.
The consumer will buy more milk and more T-shirts if the price because the Consumer Price Index raises from 150 to 195, then we can say that the price raises by 45%.
If the Prices raise by 45%, then the actual raised price of the quart of milk would be $1.45 [tex](1 \times 45\%)[/tex], and the raised price of the T-shirt is 11.60, then current prices of both the products are lower than the expected price.
Hence, the customer will buy more milk and more T-shirts.
Learn more about the CPI, refer to:
https://brainly.com/question/26682248
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