please help economics Country A produced the following quantity of gauges and potatoes:20012002GoodGaugesQuantityPriceQuantityPrice8000$410000$3Potatoes 6000$85000$14a. Using 2001 as the base year, what are the price indexes for 2001 and 2002?b. What is the inflation rate using this index?C. What is the percent change in real output using this index?

The total value of goods for each year is calculated by multiplying the quantity of each good by its…

Answered: Country A produced the following…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter17: Inflation

Section: Chapter Questions

Problem 5SQ

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The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.
Construct the price index for a fruit basket in each year using 2003 as the base year.
The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.
Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the GDP deflator to convert from nominal to real would be more appropriate than using the CPI.
Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?
If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 months
What has been a typical range of inflation in the U.S. economy in the last decade or so?
How to Measure Changes in the Cost of Living introduced a number of different price indices. Which price index would be best to use to adjust your paycheck for inflation?
What is indexing?
Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the CPI to convert from nominal to real would be more appropriate man using the GDP deflate:
Over the last century, during what periods was the U.S. inflation late highest and lowest?
A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest 0f the adult population is out of the labor force. Whats the unemployment rate? What share of population is in the labor force? Sketch a pie chart that divides the adult population into these three groups.

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