Inflation Rate (%) 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00% Inflation Rate for COUNTRY A and COUNTRY B 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Year COUNTRY A COUNTRY B
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- Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time payment of 20,000. However, if the inflation rate is 6 per year, how much buying power will that 20,000 have when measured in todays dollars? Hint: Start by calculating the rise in the price level over the 16 years.Table 2 Price per Unit in 2005 $2.00 $2.00 Units Purchased 2007 2008 Blueberries 9007 $2.10 $2.40 $2.50 $3.00 %243.50 $4.00 8. Pincapples Cheese 007$ $42.50 $3.00 $2.50 7. Refer to Table 2. The lowest inflation rate is between the years 2005 and 2006. cannot be determined from the given information 2006 and 2007. 2007 and 2008.Typically, how is inflation measured? daily weekly monthly quarterly annually
- What is the month-over-month rate of inflation in May? If applicable, April is the reference period, round to two decimal places, and omit dollar or percentage signs from your answer. Month QA PA QB PB Qc Pc April 4 $0.63 May 4 $0.58 June 4 $0.64 444 $0.55 10 $0.62 $0.74 10 $0.72 4 $0.67 10 $0.78Year Raise Starting Salary Ending Salary Absolute Difference in $ from prior year Relative increase from 2012 in % 2018 2% 74636 NA 2019 2% NA 2020 2% NA 2021 2% NA Na na na na na NA na na na na na na Total NA NA NA a. fill in chart b. What is the inflation adjusted value of their 2018 salary in 2020?If the CPI in period 1 is 125 and the CPI in period 2 is 150, then the rate of inflationbetween period 1 and period 2 isA) 20%.B) 25%.C) 30%.D) 50%
- Question 11 Given the following numbers for this economy. What is the average annual inflation rate between base year and year 4 as per the CPI method? Base year Year + 5 Year + 4 Basket Quantities Price Price Price Product A 1 220 250 290 Product B 70 75 85 Product C 20 15 15 14 Product D 20 30 31 33 Product E 100 5 5.2 5.3 4.44% (B) 18.44% c) 1.11% (D) 9.17% E) 4.53% O © © © ©Inflation Rate (П) 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 0 1,000 15.0% 14.0% LRAS 13.0% 12.0% 11.0% 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Real GDP (Y) AD 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 Consider the graph above. It is also in the files folder under the name Short Run and the Long Run. The graph pertains to a hypothetical country. Marginal propensity in this country is MPC = 0.75. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. Finally the central bank comes to its senses (as the U.S. FED did in 1982) and realizes that 8 percent inflation target is way too high. So it decides to reduce the long-term target inflation rate to 2 percent through a drastic contractionary monetary policy. This policy causes the inflation rate to drop to Moreover, a cyclical…Question 7 15.0% 14.0% 13.0% 12.0% 11.0% .10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Rate (n) down to 0 decreases to 5.04 1,000 2,000 10.04 3,000 4,000 5,000 Consider the graph above. It is also in the files folder under the name Short Run and the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent (I know, it is too high. We will deal with this problem later after appointing a new chairperson for the Fed). The natural rate of unemployment is 5 percent and Okun's alpha is 8. 7000.00 LRAS Suppose that consumer confidence in the economy declines and as a result AD decreases by 3,000 units. This reduction in demand causes the inflation rate to slow 7.00 percent in the short run. In the short run, the real GDP percent. AD Real GDP (Y) SRAS 6,000 7,000 8,000 9,000 10,000 3 11,000 12,000 13,000 14,000 15,000 16.000 17,000…
- 15.0% 14.0% 13.0% 12.0% 11.0% . 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Rate (n) 0 1,000 2,000 3,000 000't 5,000 6,000 000'2 8,000 9,000 000'0 LRAS 3 11,000 12,000 13,000 Real GDP (Y) This policy causes the inflation rate to drop to 14,000 9 AD SRAS 15,000 16,000 17,000 18,000 19,000 20,000 Short Run and Consider the graph above. It is also in the files folder under the name the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. Finally, the president of the country appoints a new chairperson for the central band and the chair decides to bring the runaway inflation under control (as the U.S. FED did in 1980). The new chair realizes that 8 percent inflation target is way too high. So, s/he decides to reduce the long-term target inflation rate to 2…A bicycle tire company performed a web-based study of a popular tire retail price over time. The study indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over the next 5 years. a. Determine the annual rate of inflation over 5 years to increase the price from $16.00 to $19.00. b. Determine the market interest rate that must be used in economic equivalence computations if inflation is considered and real 8% per year interest rate is expected.John bought his car 3 years ago worth 230,000, his friend Joshua bought the same model this year costing 320,000. Compute for the inflation rate. Rate: % (2 decimal places)
