ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Related questions
Question
Transcribed Image Text:2. Calculating and categorizing inflation
This table indicates the historical level of the Consumer Price Index (CPI) for the United States for 1972, 1973, and 1974.
Complete the table by (1) selecting the inflation rates for 1973 and 1974, and (2) indicating for each year whether there has been inflation, deflation,
or hyperinflation.
Year CPI Inflation Rate Change in Price Level
1972 41.8
1973
44.4
1974 49.3
What rates of inflation for 1975 would be consistent with disinflation between 1974 and 1975? Check all that apply.
61.0%
21.0%
10.8%
10.9%
What rates of inflation for 1975 would be consistent with hyperinflation? Check all that apply.
30.1%
120.1%
-100.1%
100.1%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Given the following table about the level of the consumer price index (CPI), perform calculations and show your work in the coming parts of the question. Consumer Price Index Year Consumer Price Index 2015 139.5 2016 144.7 2017 2018 160.1 2019 168.1 Calculate the inflation rate in 2016. If the inflation rate was 6 percent in 2018, calculate the CPI in 2017.arrow_forward1. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2019, 2020, and 2021. The cost of each item in the basket and the total cost of the basket are shown for 2019. Perform these same calculations for 2020 and 2021, and enter the results in the following table. Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) 10 15 50 7 1 100 100 150 1 150 50 2 100 10 100 1,000 5 5 5 5 Suppose the base year for this price index is 2019. Between 2019 and 2020, the CSPI increased by 2019 1,400 100 110 1 3 120 5 5 2020 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price (Dollars) 11 140 1 4 150 5 5 %.…arrow_forwardConsider the following price indexes: 90 in 2017, 100 in 2018, 110 in 2019, 121 in 2020, and 150 in 2021. Which year is likely the base year? What is the inflation rate from 2019 to 2020? If the cost of market basket in 2018 is $2,000, what is the cost of same basket of goods in 2017? 2021? Calculate...arrow_forward
- A price index for a basket of goods over four years was calculated to be: 2014 = 92, • 2015 =97, • 2016=100, • 2017=107. Calculate the inflation rate for each year so that you will enter: Blank #1 = Inflation Rate for 2015 Blank #2 = Inflation Rate for 2016 • Blank #3 = Inflation Rate for 2017 What is the base year in this scenario? • Blank #4 = Base year for this basket %3D Round to two decimal places Blank # 1 Blank # 2 Blank # 3 Blank # 4arrow_forwardThe table below shows the annual change in the average nominal wage and inflation rate since 2008. a. Compute the percentage change in real income for each year shown in the table. Instructions: In part a, round your answers to two decimal places. In parts b and c, enter your answers as a whole number. If entering a negative number, include a minus sign. Percentage Changes in Nominal Income and Prices Year 2008 2009 2010 2011 2012 2013 Annual Inflation Rate (percent) 3.78% -0.39 1.6 3.09 2.02 1.42 Annual Nominal Wage Growth (percent) 0.31% -1.1 -0.69 1.27 2.46 2.07 Annual Real Wage Growth (percent) b. Of the years listed above, the paycheck of the average worker declined in c. Of the years listed above, the purchasing power of the average worker declined in of the six years. d. The average real income of households can increase whether the nominal wage increases or decreases of the six years.arrow_forward4. Good X Y Z Quantity 10 20 5 Price in 1999 $5 $10 $6 Price in 2000 $6 $10 $10 Assume year 2000 is the base year. a) Calculate the market basket value for each year. What is the consumer price index in 1999? b) What is the inflation rate between 1999 and 2000?arrow_forward
- A) Inflation is the steady and widespread increase in prices. The inflation rate, measured by CPI, rose .1% in May (since April) and rose a total of 4% year-over-year (May 2022 to May 2023). Read the BLS report on the Consumer Price Index and identify an “item” or “all items” and begin to consider why the price increased. Do a news search or using (clear, logical, rational) reasoningexplain whether prices are increasing because demand increased or because supply decreased. Graph and explain your answerarrow_forwardA) Inflation is the steady and widespread increase in prices. The inflation rate, measured by CPI, rose .1% in May (since April) and rose a total of 4% year-over-year (May 2022 to May 2023). Read the BLS report on the Consumer Price Index and identify an “item” or “all items” and begin to consider why the price increased. Do a news search or using (clear, logical, rational) reasoning explain whether prices are increasing because demand increased or because supply decreased. Graph and explain your answerarrow_forwardConsider a simple economy that only produces: pencils, t-shirts, and bananas. Using the information in the table below, calculate the inflation rate for 2020, as measured by the consumer price index. Product Pencils T-shirts Bananas 1.9% 1.1% O-1.1% 1.5% O-1.9% Quantity 8 15 5 Base year price (2010) $2 $5 $1 Price (2019) $3 $7 $1.50 Price (2020) $3.50 $6.75 $1.75arrow_forward
- The following figures represent the CPI indices (base period 1982–1984 = 100) for urban consumers in U.S. cities. Determine the average general inflation rate between 2001 and 2005. Use the following data: Base Calendar Year CPI 2001 176.9 1 2002 179.8 2 2003 183.8 3 2004 188.0 4 2005 194.6 The average inflation rate between 2001 and 2005 is OA. 3.05% OB. 4.42% OC. 1.93% OD. 2.41%arrow_forwardConsider Table 2 above. Calculate the US inflation rate from 2003 to 2004. (round to two decimal places) A) 1.19% B) 1.73% C) 2.41% D) 2.66%arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education