ECON MACRO (with ECON MACRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
5th Edition
ISBN: 9781305659094
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 10, Problem 1.2P
To determine
Real wage rate and nominal wage rate.
Concept Introduction:
Real wage rate: Inflation is the rate at which the commonprice level for goods and services are increasing.
Nominal wage rate: Nominal wage is the money wage received by the labor. It is not adjusted to inflation.
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Year 2019
Product Quantity
Apples 10
Bananas 17
Your Answer:
Average Price
per Unit
Answer
$5
$20
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Year 2020
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6
7
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per Unit
Using year 2020 as the base year, the economy's consumer price index (CPI) in
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(Your answer should include the first decimal point, if any.)
$16
$24
17) Consider a simple economy that produces only three products. Use the information in the following table to
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"
1999 2005 2006
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11
16.2
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Haircuts
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DVDs
2
10
6
10
2
15
2.45
15
2.4
14
[economics] could u please find the inflation rate using CPI and GDP deflator respectively? thx!
Chapter 10 Solutions
ECON MACRO (with ECON MACRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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Similar questions
- /arrow_forwardQuestion 1[Consider the effects of an increase in the global price of oil. For a country such as Australia, which is a net exporter of oil, this development will imply that the CPI will increase roughly by the same amount as the increase in the GDP deflator. (100 words) Your answer: [True/False/Uncertain and explain why]arrow_forwardThe consumers in the economy buys only two general types of products: Apples, and Bananas. Price and Quantity information of these items over a period are shown below: Year 2019 Year 2020 Product Quantity Average Price per Unit Quantity Average Price per Unit Apples 7 $5 9 $12 Bananas 18 $10 7 $16 Using year 2020 as the base year, the economy's consumer price index (CPI) in year 2019 is ______. (Your answer should include the first decimal point, if any.)arrow_forward
- Calculate a new consumer price index for the data in the following exhibit. Assume that current-year prices of Twinkies, fuel oil, and internet are $0.95/package, $1.25/gallon, and $15.00/month, respectively. Calculate the current year’s cost of the market basket and the value of the current year’s price index. What is this year’s percentage change in the price level compared to the base year? Product (1) Quantity in Market Basket (2) Prices in Base Year Twinkies 365 packages $ 0.89/package Fuel oil 500 gallons 1.00/gallon Internet 12 months 30.00/montharrow_forwardProblem 3: Again, consider the country of Opalia that produces two goods: footballs and basketballs. Below is a table showing prices and quantities of common consumer purchases for the past three years: Price of Footballs Price of Basketballs Qd Footballs Qd Basketballs Year Year 1 10 12 33 4 Year 2 12 4 15 Year 3 18 14 a) Compute the CPI index (using year 1 as the base). b) Compute the inflation rate. c) Compare the answer to part b) and the answer you found for problem 1, part d)? What is the origin of the difference?arrow_forward3. In a small community, breakfast is the most important meal of the day. Therefore, the only two goods that this community produces are coffee and scones in the following amounts: Year 2020 2021 Quantity 60 cups 90 cups Coffee Price $1.25 $1.45 Quantity 45 units 65 units Scones Price $2.10 $3.95 a) Calculate the inflation rate for 2021 using the GDP deflator method (assume that 2020 is the base year for real GDP calculations). Show your work. b) Calculate the inflation rate for 2021 using the CPI method (assume that 2020 is the base year for CPI calculations). Additionally, assume that the consumption basket for both years contains only 10 cups of coffee and 40 scones. Show your work. c) Compare the results of both inflation calculations and explain why they are similar or different based on the two methods and on the specific data used in this example.arrow_forward
- a) Consider the following consumption data for the economy of Ruthenia: Quantity Prices 2021 $5.55 $420 $12500 $0.36 Item Price 2022 $4.65 Pizzas 1500 Computers 120 $480 $15200 $0.44 $35 $47 Cars 39 Apples Massages Accounting Services 7800 420 $31 190 Calculate the CPI for both years as well as the inflation rate. $49arrow_forwardSolve the attachment.arrow_forwardTyped plzzx Asaparrow_forward
- 7arrow_forwardCongratulations! Your boss has given you a raise. However, you want to know whether your purchasing power has increased, since inflation is also rising. The table below gives you data for wages and the Consumer Price Index (CPI) for the last two years. Wage ($/day) CPI Year 1 $ 2000 CPI 120 Year 2 $2200 CPI 129.6 The nominal percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.) Part 2 The real percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.)arrow_forward5arrow_forward
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