100 $2.00 180 2007 $5.00 120 $2.50 200 2008 $6.00 150 $3.50 200 (a) Compute the growth rate of real GDP of Year 2007. (b) Compute the inflation rate of Year 2008, using GDP deflator as a measure of general price level. (c) Suppose that the CPI is calculated using a market basket consisting of 150 Sandwiches and measure of general

100 $2.00 180 2007 $5.00 120 $2.50 200 2008 $6.00 150 $3.50 200 (a) Compute the growth rate of real GDP of Year 2007. (b) Compute the inflation rate of Year 2008, using GDP deflator as a measure of general price level. (c) Suppose that the CPI is calculated using a market basket consisting of 150 Sandwiches and measure of general

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The nominal interest rate is equal to ? (a).Real interest +inflation (b). Real interest *inflation (c). Real interest -inflation (d)Real interest / inflation 2. Net investment is ......? (a). Gross investment minus household investment. (b). Gross investment minus government investment (c). Gross investment minus capital consumption allowance. (d). Gross investment minus inflation
- The table below pertains to Greenland, an economy in which the typical consumer's basket consists of 150 Boxes of Apples and 200 Boxes of Bananas. Year Price of Apple Price of Bananas 2018 $15 per Box $12 per Box 2019 $14 per Box $13 per Box 2020 $17 per Box $18 per Box Referring to the above table compute the followings:(The base Year 2018). - The cost of the basket in 2018,2019,2020. The CPI for 2018,2019,2020. - The Inflation Rate in 2020.
Price Quantity Year (Dollars per sticker) (Number of stickers) 2020 3 210 2021 2 150 2022 3 125 Year 2020 2021 Use the information from the preceding table to fill in the following table. 2022 Stickers From 2021 to 2022, nominal GDP Nominal GDP Real GDP (Dollars) (Base year 2020, dollars) GDP Deflator The inflation rate in 2022 was Price (Dollars per paper plate) and real GDP 4 4 Paper plates 4 Why is real GDP a more accurate measure of an economy's production than nominal GDP? Quantity (Number of paper plates) 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. O Real GDP is not influenced by price changes, but nominal GDP is. O Real GDP includes the value of exports, but nominal GDP does not. 200 180
2a. Compute the price index for each year. Use the first year as the base year. What was the inflationrate between the two years.Item Quantity Unit Price-Last Year Unit Price-This YearCoffee 20 pounds $3.00 $4.00Tuition 1 year 4,000.00 7,000.00Pizza 100 pizzas 8.00 10.00VCR rental 75 days 15.00 10.00Vacation 2 weeks 300.00 500.00
Calculate the inflation rate experienced in 2014 and 2015 based on the CPI for each year below:
The following Table 2 gives the consumer price index from year 2012 to 2017. (i) Compute CPI for year 2015 by using year 2005 as the base year. (ii) Compute CPI for year 2012 by using year 2014 as the base year. (iii)Construct another index series using 2016 as the base year and interpret the index number for the year 2017.
B. Consumer Price Indexes (CPI) are index numbers and are used to compare the evolution of prices over the years. The rate of change of the CPI is known as the inflation (or deflation) rate. The following table provides the CPI for two different base years (a) and (b). Complete the blanks in CPI (a) and CPI (b) by creating two spliced indexes: CPI (b) Year 2010 2011 2012 2013 2014 2015 CPI (a) (base 2006) 108.589 112.059 (base ) Inflation rate (a) Inflation rate (b) 100 102.446 103.889 103.732 103.213 Compute inflation rate in the economy (rate of change of CPI) by using both the index (a) and (b). Is there any difference in the results? _____since they CPI (a) and CPI (b) are showing. evolution of prices. Is there any year with deflation?
Question 2 Part (a) Refer to the table below for a very simple economy producing three goods: education, pizzas and cars. Steel panels are needed for car production, cheese is necessary for making pizzas and projectors are used for educational service. Product Steel panels Education Cars Cheese Pizzas Projectors Quantity 40 400 400 2500 2500 4000 2017 Price $5000 $1000 $10000 $1.50 $9.00 $2000 Quantity 50 450 500 3500 3500 5000 2022 Price $6000 $1100 $12000 $1.50 $12.00 $3000 What is the nominal GDP for the economy in 2022? What was the nominal GDP in 2017? What is the real GDP in 2022 using 2017 prices as base year prices? What is the overall real GDP growth rate between 2022 and 2017? Part (b) Assume for an economy, there are 11.5 million people employed, unemployment rate is 5.2%, labor force participation rate is 64%, number of defence force personnel
3. Calculate the Inflation rates, evaluate the rates during the years and between the years. Discuss the Implications. Year/MonthJune(CPI)December (CPI)Inflation Rates 2016 (CPI)326.25 425.65? 2017 (CPI)430.20 629.60 ? 2018 (CPI)550.50 770.00? Inflation Rates? ? ? ?
In 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