2. Alternative price indexesBecause there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of howprices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.The GDP deflator for this year is calculated by dividing theusingby theusingand multiplying by 100.However, the CPI reflects only the prices of all goods and servicesIndicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply.Shows up in the...GDPScenarioDeflatorCPIA decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S.but not bought by U.s. consconsumersAn increase in the price of a Japanese-made television that is popular among U.S. consumers

GDP deflator = (nominal GDP / Real GDP)*100 Nominal GDP market value of final goods and services…

Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI refilects only the prices of all goods and services Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Shows up in the... GDP Scenario Deflator CPI A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S.

Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI refilects only the prices of all goods and services Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Shows up in the... GDP Scenario Deflator CPI A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

The nation of X City produces and consumes two goods: educational services and pizza. Use the following table to answer the questions below: Educational Services Pizza Year Quantity Price Quantity Price 2010 2 $2,500 250 $10 2015 4 $3,500 300 $12 2020 5 $3,200 400 $15 a) Using a method similar to the CPI and using 2010 as the base year, suppose the standard consumer basket is 1 unit of educational services and 100 pizzas, construct a consumer price index for this economy. What is the CPI for 2010, 2015, and 2020? b) What was the average annual inflation rate between 2010 and 2020 according to the CPI? c) Using a method similar to the GDP deflator and using 2010 as the base year, construct the GDP deflator for this economy. d) What was the average annual inflation rate between 2010 and 2020 using the GDP deflator? e) is the inflation the same between 2015 and 2020 using the CPI and GDP deflator? Explain why or why not? Explain.
Is the consumer price index a good measure of the general price increase of consumers? How?
Calculate the inflation rate using the GDP deflator based on the Laspeyres, Paasche, and chain- weighted indexes of GDP (use the approximate formula).
compare and contrast the calculations for the consumer price index and the GDP price index as measures of inflation.
Which goods are supposed to be included in the CPI? Group of answer choices All goods and services that typical consumers buy. All goods and services produced in the economy. All goods and services in the consumption component (C) of the GDP. All the goods, but not the services, in the consumption component (C) of the GDP.
Here are some recent data on the US consumer price index: Year CPI Year CPI Year CPI 2016 240.0 2011 224.9 2006 201.6 2015 237.0 2010 218.1 2005 195.3 2014 236.7 2009 214.5 2004 188.9 2013 233.0 2008 215.3 2003 184.0 2012 229.6 2007 207.3 2002 179.9 Compute the inflation rate of each year 2003-2016 and determine which were years of inflation. In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any year?
The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year (Year 1) and in the following year. Product Base Year (Year 1) Quantity Price in the Base Year Price in Year 2 Pizza 25 $2.00 $2.50 T-Shirts 4 $10.00 $9.00 Rent 1 $450.00 $495.00 In Year 1, the CPI for the economy is nothing. (Round both answers to one decimal place.) In Year 2, the CPI for this economy is nothing.
Would excluding certain goods and services from CPI be beneficial for policymakers?
Use the following table to answer the question. The table shows the prices and the quantities consumed in Vegetarian Country. Suppose the base year is 2020. Also, suppose that 2020 is the year the typical consumption basket was determined, so the quantities consumed in 2020 are the only quantities needed to calculate the CPI in each year. Year Price of Carrots Quantity of Carrots Price of Celery Quantity of Celery 2020 $2.00 100 $1.00 100 2021 2.50 90 0.90 120 2022 2.75 105 1.00 130 What are the values of the CPI in 2020, 2021, and 2022, respectively? a. 2020: 100; 2021: 111; 2022: 139.6 b. 2020: 100; 2021: 109.2; 2022: 116 c. 2020: 100; 2021: 113.3; 2022: 125 d. 2020: 83.5; 2021: 94.2; 2022: 100 e. None of the answer choices are correct.
In each of the following cases, explain clearly how the CPI might misrepresent changes in consumer prices (Commodity substitution bias, Introduction of new goods, or Un-measured quality changes). In each case, speculate as to whether CPI overstates or understates consumer expenses. (a) By 1990, expensive personal computers became a common expenditure in consumer baskets. However, some governments were still calculating the consumer’s basket using a 1975 survey. (b) Between 2007 and 2015, there were significant improvements in smartphones. (c) Compared to 1970, households in 2015 took more vacations. (d) Food quality has deteriorated over time, even as consumers purchase the same amount.
Question 1: In an economy, there are only two goods (Cars and cycles) produced. The data for last three years is given in the below table. Calculate the nominal and real GDP of three years and then find the GDP deflator for all the three years. Find year on year (YoY) inflation for 2018 and 2019. Note: the base year for this economy is given as 2017. year Price of Car (AED) Number of Car Price of cycle (AED) Number of cycle 2017 1000 10 200 900 2018 1200 15 210 1000 2019 1500 25 250 1500 Question 2: Explain the role of fiscal and monetary policy in an economy facing a recession. Use appropriate graph to justify your answer
Calculate the GDP deflator and the rate of inflation for each year: (€ million) Nominal GDP Real GDP 2013 3,540,000 2,900,000 2014 4,730,000 3,250.000 2015 5,110,000 4,800,200