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- When measuring the inflation rate it is best to calculate: the percentage change in the cost of a fixed basket of goods from month to month. the percentage change in real GDP from month to month. the percentage change in consumer expenditures from month to month. O the percentage change in nominal GDP from month to month. Previous Next ASUSThe table below relates to the economy of Mainland, where the typical consumer's market basket consists of 2 televisions and 300 hamburgers. Year Price of a television Price of a hamburger 2013 $600 $2 2014 $550 $3 2015 $500 $2 Refer to Table above. If the base year is 2014, then the consumer price index was Select one: a. 80 in 2013, 100 in 2014, and 60 in 2015. b. 180 in 2013, 200 in 2014, and 160 in 2015. c. 98 in 2013, 100 in 2014, and 96 in 2015. d. 90 in 2013, 100 in 2014, and 80 in 2015.Question 4 Between 2015 and 2016, the CPI of a small nation rose from 1.82 to 1.85. If household incomes rose by 3% during that period of time, which of the following is true? O The purchasing power of household income fell between 2015 and 2016. O The purchasing power of household income rose between 2015 and 2016. O The purchasing power of household income remained constant between 2015 and 2016. O The CPI cannot be used to determine how the purchasing power of household income changes over time.
- The CPI denotes the relative cost of the bundle of goods and services Compute the Big Mac price years Y and Z given the information in base year X Assume the Big Mac price varies directly with the CPI $1.95 108 US price of a Big Mac in base year X US CPI in base year X CPI, Year Y CPI, Year Z Big Mac, Year Y Big Mac, Year Z 150 300 $2.71 $5.42 92 $1.72 $1.66 275 $2.71 $4.97 103 $1.82 $1.86 575 $8.13 $10.38 85 $3.16 $1.53 95 150 101 450 175Question 11 Not yet answered Marked out of 1.00 P Flag question An important difference between the GDP deflator and the CPI is that Select one: O a. the GDP deflator reflects the prices of goods and services bought by producers, whereas the CPI reflects the prices of goods and services bought by consumers O b. the GDP deflator reflects the prices of all goods and services produced domestically, whereas the CPI reflects the prices of goods and services bought by consumers Oc. the GDP deflator reflects the prices of all goods and services produced by a nation's resources, wihereas the CPI reflects the prices of goods and services bought by consumers Od. the GDP deflator reflects the prices of goods and services bought by producers and consumers, whereas the CPI reflects the prices of goods and services bought by consumersUsing the table below, find the real value of a payment of $2,500 to be recelved each year given the following CPI values. Next find the amount that this $2,500 should be adjusted to in order to keep its real value at $2,500. Instructions: Round your answers to two decimal places. Cost-of-living adjusted payment BUL 2,500 I Real value of Year CPI $2,500 2015 T 100 2016 103 | 2017 105 2018 110
- DBS Farms is a producer and retailer of farm products. DBS main products are Mangoes, Pawpaw and Pineapples. The current price of the Mangoes per Kilogram is GHS 50, the Pawpaw/Kg is GHS 80 and the Pineapple is GHS 40. This year the DBS Farms sold 10,000 kgs of Mangoes, 20,000 kgs of Pawpaw and 1 million kgs of Pineapples. In an attempt to improve revenue, the managers of the firm have decided to increase all prices by 10%. Market research has suggested that the price elasticity of demand for each product is: Mangoes: - 1.5; Pawpaw: -Year: 1973 1974 1975 1976 1977 1978 1979 1980 1981 O 1978 Real GDP in 2005 Dollars O 1979 (Billions) 4,917 4,889 4,879 5,141 5,377 5,677 5,855 5,839 5,987 % Change from the previous year 5.8 -0.6 -0.4 Using the above table, which year was the misery index the highest? 5.6 4.6 5.5 3.2 -0.2 2.5 Civilian Unemployment % (year's end) 4.9 5.6 8.5 7.7 7.1 6.1 5.8 7.1 7.6 Inflation Rate for the CPI (Dec. to Dec.) 6.2 11.0 9.1 5.8 6.5 7.6 11.3 13.5 10.3If real gross domestic product (GDP) in a particular year is $5,000 trillion and nominal gross domestic product (GDP) in that same year is $4,000 trillion, then the: consumer price index (CPI) is 125. O economic activity has decreased by 20 percent. GDP price index is 125. there was no inflation from the base period.
- To calculate the consumer price index we mustA. Compare the value of the current basket to the base year basketB. Calculate the value of the basket and estimate CPIC. Measure the GDP DeflatorD. Estimate the inflation rate3. Suppose an economy has two years worth of data, years 1 and 2. Sup- pose there are also two goods, bread and corn. Suppose, in year one, 30 units of corn are sold at a price of 1 $ and 20 units of bread are sold at a price of 2 S. Suppose in year two, 60 units of corn are sold at a price of 1.5 $ and 80 units of bread are sold at a price of 4 $. Compute nominal GDP in both periods. Compute real GDP under both defini tions of a base year. Compute also a chain weighted real GDP series. For all three measures, compute the GDP deflatorIn a country, people use only three products (Milk, Apple and Bread) for consumption. A typical basket for the country contains 10 liters of milk, 5 kg of apples and 15 packs of bread. The Price in AED of these products are given in the below table. The base year is given as 2015. Find the consumer price index (CPI) and inflation for all the years? What are the shortcomings of CPI? Year Milk per liter Apple per KG Bread Per packet 2015 10 3 2 2016 10.5 3.5 2 2017 11.5 5 3 2018 12 6 4 2019 14 7 5 2020 16 8 5