1. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2017, 2018, and 2019. The cost of each item in the basket and the total cost of the basket are shown for 2017. Perform these same calculations for 2018 and 2019, and enter the results in the following table. 2017 2018 2019 Price Cost Price Cost Price Cost Quantity in Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) Notebooks 10 30 4 Calculators 1 75 75 80 104 Large coffees 300 600 2 Energy drinks 75 150 4 5 Textbooks 90 720 110 120 Total cost 1,575 Price index 100 Suppose the base year for this price index is 2017. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2017 and 2018, the CSPI increased by Between 2018 and 2019, the CcSPI increased by

1. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2017, 2018, and 2019. The cost of each item in the basket and the total cost of the basket are shown for 2017. Perform these same calculations for 2018 and 2019, and enter the results in the following table. 2017 2018 2019 Price Cost Price Cost Price Cost Quantity in Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) Notebooks 10 30 4 Calculators 1 75 75 80 104 Large coffees 300 600 2 Energy drinks 75 150 4 5 Textbooks 90 720 110 120 Total cost 1,575 Price index 100 Suppose the base year for this price index is 2017. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2017 and 2018, the CSPI increased by Between 2018 and 2019, the CcSPI increased by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following price indexes: 90 in 2015, 100 in 2016, 110 in 2017, 121 in 2018, and 150 in 2019. Answer the following questions. (See pages 157–158.) a. Which year is likely the base year?b. What is the inflation rate from 2016 to 2017?c. What is the inflation rate from 2017 to 2018?d. If the cost of a market basket in 2016 is $2,000, what is the cost of the same basket ofgoods and services in 2015? In 2019?
am. 19.
Here are some recent data on the US consumer price index: Year CPI Year CPI Year CPI 2016 240.0 2011 224.9 2006 201.6 2015 237.0 2010 218.1 2005 195.3 2014 236.7 2009 214.5 2004 188.9 2013 233.0 2008 215.3 2003 184.0 2012 229.6 2007 207.3 2002 179.9 Compute the inflation rate of each year 2003-2016 and determine which were years of inflation. In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any year?
Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student’s annual purchases. Suppose the following table shows the information on the market basket for the CSPI and the prices of each of the goods in 2017, 2018, and 2019. The cost of each item in the basket and the total cost of the basket are shown for 2017. Question1 In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2017 and 2018, the CSPI increased by_________% Between 2018 and 2019, the CSPI increased by__________% Question2 Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. A. Professors required each student to buy 10 textbooks, regardless of the price. B. The quality and design of calculators improved dramatically from 2017 to 2019. For…
Briefly explain whether you agree or disagree with the following statement: "I don't believe the government price statistics. The CPILOADING... for 2018 was 210, but I know that the inflation rateLOADING... couldn't have been as high as 110 percent in 2018." Part 2 A. Agree. A CPI of 210 is a 110% increase in the price level from the base year. The inflation rate in 2018 is 110%. B. Agree. A CPI of 210 is a 110% increase from 100, which is impossible. C. Disagree. The inflation rate is the percentage increase in the price level from the previous year, not the base year. D. Disagree. The inflation rate is always the same as the natural rate of unemployment, which is about 5%.
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1. Calculating inflation using a simple price index.
Consider the following Economy: Quantity Oranges 300 Price of Apples Quantity apples Price oranges Time Period 1 100 2 1 1.5 150 3 300 2 Calculate the chain-weighted inflation rate using the Implicit GDP Price Deflators If you get an inflation rate of 3.15%, your reported answer should be 3.15
The information on price and quantity of three products consumed by a typical household in the year 2020 and 2021 is given by the table below 2020 2021 Price Quantity Quantity 10 Price $5.50 Fish 12 $5 $10 Beef 5 $11 4 Train Ride $8 20 $9 22 Using 2020 as the base year, measure the CPI for 2021 and the inflation rate in 2021. Does this inflation rate correctly measure the cost of living changes for households in 2021? Explain. "The transfer payment does not have any effect on the gross domestic product of an economy". Discuss the validity of this statement.
Given the following table about the level of the consumer price index (CPI), perform calculations and show your work in the coming parts of the question. Consumer Price Index Year Consumer Price Index 2015 139.5 2016 144.7 2017 2018 160.1 2019 168.1 Calculate the inflation rate in 2016. If the inflation rate was 6 percent in 2018, calculate the CPI in 2017.
Consider a fictional price index, the University Student Price Index (USPI), based on a typical university student's annual purchases. Suppose the following table shows information on the market basket for the USPI and the prices of each of the goods in 2016, 2017, and 2018. The cost of each item in the basket and the total cost of the basket are shown for 2016. Perform these same calculations for 2017 and 2018, and enter the results in the following table. 2016 2017 2018 Price (Dollars) Cost (Dollars) Price (Dollars) Cost (Dollars) Quantity in Basket Notebooks 10 3 30 3 Calculators 1 75 75 80 Large coffees 300 2 600 2 Energy drinks 75 2 150 4 Textbooks 8 90 720 110 Total cost 1,575 100 Price index Suppose the base year for this price index is 2016. In the last row of the table, calculate and enter the value of the USPI for the remaining years. Between 2016 and 2017, the USPI increased by %. Between 2017 and 2018, the USPI increased by % Which of the following, if true, would…
1. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2019, 2020, and 2021. The cost of each item in the basket and the total cost of the basket are shown for 2019. Perform these same calculations for 2020 and 2021, and enter the results in the following table. Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) 10 15 50 7 1 100 100 150 1 150 50 2 100 10 100 1,000 5 5 5 5 Suppose the base year for this price index is 2019. Between 2019 and 2020, the CSPI increased by 2019 1,400 100 110 1 3 120 5 5 2020 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price (Dollars) 11 140 1 4 150 5 5 %.…