If the CPI in period 1 is 125 and the CPI in period 2 is 150, then the rate of inflation between period 1 and period 2 is 30%. 50%. 20%. 25%.

Sally will earn $30,000 this year and $40,000 next year. The real interest rate is 20% between this year and next year; she can borrow or lend at this rate. She has no wealth at the start of this year and plans to finish next year having consumed everything she possibly can. She would like to consume the same amount this year as next year. The inflation rate is 0%. (a) How much should Sally save this year? How much will Sally consume in each of the two years? (b) How would your answers change if the real interest rate was 40% ?

Last year the jones family earned $40,000. This year their income is $42,000. If the inflation rate was 10%, did the jones family experience an increase/decrease/no change in their Normal income? Did the jones family experience an increase/decrease/no change in the real income ?

Suppose a person works hard at a job after graduation and after her first year, her effort is rewarded with a 3% raise when the average wage increase in her company is 2%. Later, the government releases its inflation report and says that the inflation rate is 7%.   Given this information, which of the following is true regarding her standard of living?   Her standard of living has improved because the 3% raise is enough to offset the average rise in prices.   Her standard of living did not improve because the purchasing power of her income is less than it was last year.   Her standard of living has remained the same because the rate of inflation does not influence purchasing power.   Her standard of living has increased by the amount of inflation, namely, 7%.

Calculate what will be the nominal interest rate at any given loan if the inflation is 3.2% and the real interest rate is 0.8 %

The idea that a regular annual inflation rate of 35 per cent requires CPP adjustments, but a regular annual inflation rate of 25 per cent does not, is quite absurd. Discuss.

Calculate the value of inflation if real interest rate is 6.5% and the nominal interest rate is 8.2%

The consumer price index (CPI) of a country was approximately 200 at the beginning of year 2010. If inflation continued at an average rate of 2.5%, what would the index be at the beginning of year 2021?

Name Owner File size Location 5. In December 2023, the CPI-U for all items was 306.746. Five years earlier, in December 2018, the CPI-U was 251.233. What was the percentage increase in the CPI-U during those five years?

If inflation rate is 1% and nominal interest rate is 2.1%  What will be the real interest rate