Is the equilibrium at full employment, inflation or recession? Price level Aggregate Demand Aggregate Potential GDP Supply 50 $700 $100 100 $600 $200 150 $450 $450 200 $300 $480 250 $220 $500 300 $150 $510 $510 350 $100 $512
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- If the employment rate increase reine 10% to 14% the economy willThe GDP takes inflation into account and uses adjusted market prices. frictional O real adjusted O cyclical O re-evaluated2019 2020Commodities Price Quantity Price QuantityA 3 30 5 25B 4 20 5 30C 20 18 25 25a) Using the data given above, compute the Nominal and Real GDP for 2019, and 2020. (The base year is 2019). b) Compute the inflation rate for the year 2020 by using the GDP deflator.
- M25 M. N. B Problem Set #1 Calculation of Consumer Price Inflation Instructions: Complete this sheet by computing the spending for each product for both years ; then calculate the total spending for the two years each year; then compute the inflation % between BONUS: calculate total price inflation as Year = Y2016 Quantity Price Spending a weighted average 6 $10 ALL ANSWERS should also be written on the Problem Set Answer sheet Pizzas 50 Hairstyles 24 $25 Music 200 $1.80 Gasoline 350 $3.00 Shoes 6. $75 Total Price Inflation as 11 a Weighted Average 12 13 Cost of Market Basket in 2016 = Product Budget Inflation Inflation Share Rate Budget 14 Year = Y2020 Quantity Price Spending Rate Y2016 Share 15 16 $12 $28 17 Pizzas 50 Hairstyles 24 18 Music 200 $1.65 19 Gasoline 350 $3.30 20 Shoes 6 $78 21 22 Cost of Market Basket in 2020 = 23 24 25 Price Inflation from 2016 to 2020 = 26 27Commodity 2002 price Market Basket Quantity 10 lbs. 5 Ibs. 2001 price Rice Cherries $1.00 $1.75 $1.10 $2.00 Assuming that 2001 is the base year, calculate the price index for 2002. In 2002, the price index is O (Round your answer to two decimal places.) The inflation rate between 2001 and 2002 is ]%. (Round your answer to two decimal places.)↑ Inflation Measure WPI Headline WPI Headline 1 WPI Food 0.34 WPI Core 0.82 CPI Headline 0.32 CPI Food 0.41 CPI Core -0.04 Inflation Measure WPI Headline WPI Food WPI Core CPI Headline CPI Food CPI Core WPI Headline 1 0.55 0.93 0.58" 0.34" 0.77" A: 1997 02-2008 04 WPI Food WPI Core CPI Headline CPI Food CPI Core 1 0.20 0.90 0.93 0.63 1 0.09 0.26 -0.32 B: 2009 01-2019 04 WPI Food WPI Core CPI Headline CPI Food CPI Core 1 0.27 0.91" 0.89 0.74* 1 0.39 0.10 0.67* Revisit Later 1 0.94 0.81 1 0.92* 0.86* 1 0.58 1 0.61* 1 1 Table 2: Correlation matrix of inflation measures (Please ignore the meaning of the * sign) Q. Based on Table 2, we can draw the conclusion that- Select an option & Clear Response The direction of movement between CPI core and WPI headline is not necessarily the same across the years Post 2008, WPI core and WPI headline have moved in opposite directions Prior to 2009, the correlation between WPI core and WPI headline has been very weak Post 2008, CPI core and WPI headline…
- The government leaders of Nestua believe that corporations in Nestua are not paying their fair share of taxes and raise the corporate income tax rate from 20% to 30%. They are pleased the following year when corporate income tax revenues increase by $3 billion. However, the country experiences unprecedented inflation despite wages remaining steady at their previous year’slevel. After-tax corporate income remains the same as it was the previous year. Who bears theincidence of this corporate income tax increase in Nestua?The Consumer Price Index had a value of 218.8 in 2018 and a value of 226.23 in 2019. a. What was the inflation rate in 2018? b. If you borrowed $2500 in 2018 at an annual interest rate of 5.2%, what was the real interest rate of your loan based on the inflation rate in 2018 that you calculated above? 46 F Rain showers sc F1 1 1 Q Je A N 2 F2 2 W S - X Alt F3 3 E D F4 C 4 $ R F FS 5 % V F6 T Q Search G 6 B F7 C ^ Y H 7 FB & U N F9 8 J 80 * LG I M F10 9 K ( F11 - O . 0 ) Alt L : Ins = + Ctrl E 13? "1 Del Backspace PgUp Home Enter PgOn End 7 Home Shift La) Consider the following consumption data for the economy of Ruthenia: Quantity Prices 2021 $5.55 $420 $12500 $0.36 Item Price 2022 $4.65 Pizzas 1500 Computers 120 $480 $15200 $0.44 $35 $47 Cars 39 Apples Massages Accounting Services 7800 420 $31 190 Calculate the CPI for both years as well as the inflation rate. $49