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CPI in DI

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shweta5
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CPI in DI [#permalink] New post   23 Sep 2019, 01:28
Hi Experts,

Please explain 1st and 3rd option. I am stuck in this.
1. The Consumer Price Index figure for urban medical care for 2003 was _______ the figure for 2000.
I marked lower than
Correct is Higher than

2. From 1994 to 2003, the Consumer Price Index figure for urban healthcare _______


3. The Consumer Price Index figure for urban healthcare was highest in _______
I marked 1994
Correct is 2003

Kudos assured.
Please help.
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EMPOWERgmatRichC
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Re: CPI in DI [#permalink] New post   23 Sep 2019, 15:01
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Hi shweta5,

What is the source of this question? I ask because the 1st and 3rd questions involve the exact same 'quirk' in the information.

The key piece of information in the table is the wording on the 'left side' - it states "percent increase", meaning that EACH year the price increased by a certain percent.

The CPI in 1995 was about 4% higher than it was in 1994...
and the CPI in 1996 was about 3% higher than it was in 1995...
and the CPI in 1997 was about 3% higher than it was in 1996...etc.

In simple terms, the CPI got larger and larger over time, so it was at its highest during the last year in the table (re: 2003). That deduction impacts the answers for both of those questions.

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Rich
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shweta5
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Re: CPI in DI [#permalink] New post   23 Sep 2019, 21:15
EMPOWERgmatRichC wrote:
Hi shweta5,

What is the source of this question? I ask because the 1st and 3rd questions involve the exact same 'quirk' in the information.

The key piece of information in the table is the wording on the 'left side' - it states "percent increase", meaning that EACH year the price increased by a certain percent.

The CPI in 1995 was about 4% higher than it was in 1994...
and the CPI in 1996 was about 3% higher than it was in 1995...
and the CPI in 1997 was about 3% higher than it was in 1996...etc.

In simple terms, the CPI got larger and larger over time, so it was at its highest during the last year in the table (re: 2003). That deduction impacts the answers for both of those questions.

GMAT assassins aren't born, they're made,
Rich



Hi Rich,

The question is from the Veritas Test.
I didn't understand how CPI is more than 4% higher than it was in 1994.

However in the graph 1994's percent change was 5, whereas percent change in 1994 was 4, so 1995 percent age was less than 1994.
Likewise, in 1996 it was 3 and in 1995 in 4. So, I understand there is a decreasing pattern
So, how can 2003 be the highest.
Please tell me where I am wrong.

Thanks.
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Re: CPI in DI [#permalink] New post   24 Sep 2019, 11:54
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Hi shweta5,

Each vertical column in the table represents the PERCENT INCREASE in the CPI for that year. However, questions 1 and 3 ask about the ACTUAL CPI FIGURE. It might help to think in terms of real-world numbers.

For example:
IF.... the CPI in 1993 was $100, then...
the CPI in 1994 increased by about 5%... meaning that it was $100 + (.05)($100) = $105
the CPI in 1995 increased by about 4%... meaning that it was $105 + (.04)($105) = $109.20
the CPI in 1996 increased by about 3%... meaning that it was $109.20 + (.03)($109.20) = $112.48
Etc.

While the percent increase changes depending on the year, the CPI Figure INCREASES EVERY YEAR over time.

GMAT assassins aren't born, they're made,
Rich
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Re: CPI in DI [#permalink]
24 Sep 2019, 11:54

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