ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Since people buy a lot of food and oil (gasoline), we should pay most attention to fluctuations in
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- Whether one regards inflation as a “good” thing or a “bad” thing depends very much on one’s economic situation. If you are a borrower, unexpected inflation is a ["", "", "", ""] thing—it reduces the value of money that you must repay. If you are a lender, it is a ["", ""] thing because it reduces the value of future payments you will receive.arrow_forwardInflation in Mexico (using the CPI method) rose from 4.01% in August 2020 to 4.09% in October 2020. By how many percentage points should real interest rates have changed over the same period, assuming that nominal interest rates have remained fixed during this time? (Round your answer to twodecimal places. If real interest rates fell, be sure to include a negative sign. Do not include a percentage sign.)arrow_forwardUse FRED to calculate the rate of inflation using the CPI for all Urban Consumers (CPIAUCSL.) Change the time period to start in 1979. Report the highest rate of inflation you find in each of the last four decades as well as our current one (1980's, 1990s, 2000s, 2010s, and 2020s.) You don't need to provide any explanation, just state the month and year it was highest along with the rate of inflation in that month.arrow_forward
- Inflation rates, like most statistics, are imperfect measures. Can you identify two ways that the inflation rate for fruit does not perfectly capture the rising price of fruit.arrow_forwardEconomists widely agree that the Consumer Price Index understates the true U.S. inflation rate. a. True b. Falsearrow_forwardAverage inflation went up by 65.5% since the turn of the century while college tuition and fees soared by 175%. Why has the relative price of college increased so much compared to average inflation?arrow_forward
- Suppose the economy’s nominal GDP constantly grows at 9%, and real GDP constantly grows at 4%What is the inflation rate? How long does it take for an item that costs $1 today to cost $4?arrow_forwardConsider the following: Price Index in 2017 86 Price Index in 2018 100 Price Index in 2019 108 Price Index in 2020 120 Price Index in 2021 146 a. The base year is 2018 b. Calculate the inflation rate from 2018 to 2019. 8 % (Enter your response as a percentage rounded to two decimal places.) c. Calculate the inflation rate from 2019 to 2020. 11.11 % (Enter your response as a percentage rounded to two decimal places.) d. Assume the cost of a market basket in 2018 is $2,137.0. (Enter your responses rounded to one decimal place.) Calculate the cost of the same basket of goods and services in 2017. Calculate the cost of the same basket of goods and services in 2021.arrow_forwardCalculate the value of inflation if real interest rate is 6.5% and the nominal interest rate is 8.2%arrow_forward
- On the way into school you hear the following report on the radio: "inflation for the month of February was 0.4%. Over the year inflation was 2.2%." Which of the following options best explains what these figures mean? Select one: a. Inflation in February was much slower than it was in other months from the past year. b. The prices of household necessities, excluded household luxuries, increased by 2.2%, compared to 12 months ago. c. The prices of the things a typical urban consumer buys, as estimated by the Bureau of Labor Statistics, increased on average 2.2%, compared to 12 months ago. d. The government increased prices by 2.2% over the past year in order to keep pace with production costs.arrow_forwardIt has been argued that inflation and unemployment are both good and bad. Explain. Are government efforts to control inflation and brings unemployment to Zero well advised? Explain. Please put the website linkarrow_forwardnot use ai pleasearrow_forward
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