2018 Price $4 2019 Price $4.50 $18 2020 Qty 600 Qty Qty Price Butter 500 $5.00 $15 $2.50 520 Clothes Gasoline $20 100 90 80 $2 1000 $2.20 1200 1300 Use the Chain Method to calculate real GDP in 2020 and the rate of inflation in 2020 using 2018 chained do Round real GDP to the nearest dollar and round the inflation rate to the first decimal place. Real GDP in 2020: $ Inflation Rate using the Deflator in 2020:

2018 Price $4 2019 Price $4.50 $18 2020 Qty 600 Qty Qty Price Butter 500 $5.00 $15 $2.50 520 Clothes Gasoline $20 100 90 80 $2 1000 $2.20 1200 1300 Use the Chain Method to calculate real GDP in 2020 and the rate of inflation in 2020 using 2018 chained do Round real GDP to the nearest dollar and round the inflation rate to the first decimal place. Real GDP in 2020: $ Inflation Rate using the Deflator in 2020:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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It is known that in an economy the standard basket is compound according to this table: Year Food Culture Ma Dwelling P₁ P₂ Q₂ 2019 3 5 3 1 2020 4 10 4 2 4 6 2021 4 10 4 3 Calculate a general price index, and obtain the inflation rate of the economy over time If there were only one nominal wage for all workers in this economy and this wage was 1,000 m.u in 2019, how much has to be the nominal wage in 2020 and 2021 to maintain their purchasing power Q₁ P3 4 4 Q3 3 3
Table 5-2 Price of Magazines Quantity of Magazines 180 200 200 $2.00 $2.50 $3.50 Year Price of Burgers Quantity of Burgers 2017 $4.00 100 2018 $5.00 120 2019 $6.00 150 Refer to Table 5-2. Using the GDP deflator to measure the average level of prices and using 2017 as the base year, what is the economy's inflation rate? O a. 20 percent for 2018 and 30 percent for 2019 O b. 44.7 percent for 2018 and 45.5 percent for 2019 O c.25 percent for 2018 and 28 percent for 2019 O d. 20 percent for 2018 and 12.5 percent for 2019 6489a31#
a) Explain the difference between calculation of inflation through CPI and through the GDP deflator. Hint: think about which type of goods are considered for calculating inflation in each case.
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Table 2.5.4 from BEA What categories of consumption expenditures have the highest inflation rate between 2012 and 2021? Are there any categories for which prices are relatively stanle or cheaper?
Suppose your nominal income in dubai economic rose by 6.4 percent and the price level rose by 4.2 percent in some year Required: a. Calculate the percentage of real income (approximately) in dubai b. Assume that the nominal income rose by 4.1 percent and your real income rose by 2.7 percent in some year, Calculate the approximate rate of inflation
1. 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 %.…
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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 # 4