Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut, and one newspaper. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to year two, there is (a. inflation, b. deflation) at an annual rate of  ___ %.   In year one, $72.00 will buy ____ baskets, and in year two, $72.00 will buy ____ baskets.   This example illustrates that, as the price level falls, the value of money (a. rises, b. falls, c. remains the same).

Suppose, in the base year, a typical market basket purchased by an urban family costs $250.  In Year 1, the same market basket cost $950.  What is the consumer price index (CPI) for Year 1? If the same market basket costs $1000 in Year 2, what is the CPI for Year 2? What was the Year 2 rate of inflation?

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 ?

Calculate the inflation rate when Nominal Interest rate is 7% and real interest rate is 2.5%

Assume that this economy produces only two goods Good X and Good Y. If year 2 is the base year, the value for this economy's GDP deflator in year 3 is:   A-              = 120 B-               = 123   C-              =  135    D-      = 140     Assume that this economy produces only two goods Good X and Good Y. If year 2 is the base year, the value for this economy's inflation rate between year 2 and year 3 is: A-              = 1,8 ./. B-               = 1,2./.   C-              =    1,65 ./. D-      =2./.

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 %

Help!!!!

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest. If the inflation rate was 4%, what was the real interest rate you paid?

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?