Problems 69 – 72 require the following discussion. The consumer price index(CPI) indicates the relative change in the price over time for a fixed basket of goods and services. It is a cost of living index that helps measure the effect of inflation on the cost of goods and services. The CPI uses the base period 1982-84 for comparison (the CPI for this period is 100). The CPI for March 2017 was $243.80. This means that $100 in the period 1982-84 has the same purchasing power as $243.80 in March 2017. In general, if the rate of inflation averages r percent per annum over n years, then CPI index after n years is C P I = C P I 0 ( 1 + r 100 ) n Where, CPI 0 is the CPI index at the beginning of the n- year period Consumer Price Index If the average annual inflation rate is 3.1%, how long will it take for the CPI index to double? (A doubling of the CPI index means purchasing power is cut in half.)
Problems 69 – 72 require the following discussion. The consumer price index(CPI) indicates the relative change in the price over time for a fixed basket of goods and services. It is a cost of living index that helps measure the effect of inflation on the cost of goods and services. The CPI uses the base period 1982-84 for comparison (the CPI for this period is 100). The CPI for March 2017 was $243.80. This means that $100 in the period 1982-84 has the same purchasing power as $243.80 in March 2017. In general, if the rate of inflation averages r percent per annum over n years, then CPI index after n years is C P I = C P I 0 ( 1 + r 100 ) n Where, CPI 0 is the CPI index at the beginning of the n- year period Consumer Price Index If the average annual inflation rate is 3.1%, how long will it take for the CPI index to double? (A doubling of the CPI index means purchasing power is cut in half.)
Solution Summary: The author calculates the time in which the CPI index will double in 23 years.
Problems 69 – 72 require the following discussion. The consumer price index(CPI) indicates the relative change in the price over time for a fixed basket of goods and services. It is a cost of living index that helps measure the effect of inflation on the cost of goods and services. The CPI uses the base period 1982-84 for comparison (the CPI for this period is 100). The CPI for March 2017 was $243.80. This means that $100 in the period 1982-84 has the same purchasing power as $243.80 in March 2017. In general, if the rate of inflation averages r percent per annum over n years, then CPI index after n years is
C
P
I
=
C
P
I
0
(
1
+
r
100
)
n
Where, CPI0 is the CPI index at the beginning of the n-year period
Consumer Price Index If the average annual inflation rate is 3.1%, how long will it take for the CPI index to double? (A doubling of the CPI index means purchasing power is cut in half.)
Answer the problems completely. Round off your answers up to four decimal places, with correct units and box or encircle them.
Q. Table gives data on gold prices, the Consumer Price Index (CPI), and the New York Stock Exchange (NYSE) Index for the United States for the period 1974 –2006. The NYSE Index includes most of the stocks listed on the NYSE, some 1500-plus.
a. Plot in the same scattergram gold prices, CPI, and the NYSE Index.
b. An investment is supposed to be a hedge against inflation if its price and /or rate of return at least keeps pace with inflation. To test this hypothesis, suppose you decide to fit the following model, assuming the scatterplot in (a) suggests that this is appropriate:
Gold pricet = β1 + β2 CPIt + ut
NYSE indext = β1 + β2 CPIt + ut
Note that if beta2 = 1 the response exactly grows with CPI
Thank you!
If a quarterly seasonal index is 1.16, it implies that
a. the quarter's sales are 1.6% of the yearly average
b. the quarter's sales are 16% above the yearly average
c. he other three quarterly percentages will total 84%
d. the quarter's sales are 16% of yearly total sales
Chapter 4 Solutions
Precalculus: Concepts Through Functions, A Unit Circle Approach to Trigonometry (4th Edition)
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, calculus and related others by exploring similar questions and additional content below.