Year 2014 2015 2016 2017 2018 2019 Broad money (% of GDP) 107.89 113.80 115.88 113.78 111.06 109.47 Inflation Rate (%) 0.50 -1.82 -0.24 2.61 3.38 4.59
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Based on the screenshot provided, do you agree with the central bank’s decision to pursue a contractionary
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- (i) (ii) (iii) Given a consumer price index of 154.5 in the year 2019 and 165.3 in 2020, calculate the rate of inflation in 2020. The average price of a car was £35,650 in 2019. Calculate the revised price in 2020 based on the rate of inflation calculated in part (i). Assume that in 2019 Robert has invested £2000 in a bank account, which pays an annual interest rate of 6%. After a year has passed, he is paid £120 in interest. Explain whether Robert is now better off than he was the year before based on your answer in part (i).Over the last 10 years, the average rate of inflation has been 1.51%. What is thepurchasing power of a dollar today in terms of what a dollar could purchase in 2012?What is the inflation rate between 2006 and 2007? Quantity (2006) Price Quantity Price Item (2006) (2007) (2007) Restaurant meals 100 $10.00 100 $12.00 Weeks of parking $100.00 $97.50 50 50
- (b) It is given that the nominal income rose by 5% from the base year to the subsequent year. Since the growth in nominal income is less than the rate of inflation, the family is worse off in terms of what they are able to buy.Please do not give solution in image formate thanku In 1923, a certain country underwent one of the worst periods in history of hyperinflation, which is extraordinarily large inflation in prices. At the peak of the hyperinflation, prices rose 13,000% per month. At this rate, by what percentage would prices have risen in 1 year? In 1 day? (Assume 30 days per month.)CPI and Inflation Practice Problems #1 Fill in blanks in table below Market Basket Items Cheese Blue Jeans Gasoline Total Cost of Basket # of Units 2 lbs 2 pairs 10 gallons Year 1 (2000) $ per unit Total Cost $1.75 $3.50 $12.00 $ $1.25 $ $ Year 2 (2003) $ per unit Total Cost $1.50 $ xiladi $15.50 $ $1.60 $ Year 3 (2006) $ per unit Total Cost $1.50 $ $20.00 $2.70 $ $
- Typically, how is inflation measured? daily weekly monthly quarterly annuallyTable 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.DGK only please
- 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%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…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…