100 $2.00 180 2007 $5.00 120 $2.50 200 2008 $6.00 150 $3.50 200 (a) Compute the growth rate of real GDP of Year 2007. (b) Compute the inflation rate of Year 2008, using GDP deflator as a measure of general price level. (c) Suppose that the CPI is calculated using a market basket consisting of 150 Sandwiches and measure of general

100 $2.00 180 2007 $5.00 120 $2.50 200 2008 $6.00 150 $3.50 200 (a) Compute the growth rate of real GDP of Year 2007. (b) Compute the inflation rate of Year 2008, using GDP deflator as a measure of general price level. (c) Suppose that the CPI is calculated using a market basket consisting of 150 Sandwiches and measure of general

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price Quantity Year (Dollars per sticker) (Number of stickers) 2020 3 210 2021 2 150 2022 3 125 Year 2020 2021 Use the information from the preceding table to fill in the following table. 2022 Stickers From 2021 to 2022, nominal GDP Nominal GDP Real GDP (Dollars) (Base year 2020, dollars) GDP Deflator The inflation rate in 2022 was Price (Dollars per paper plate) and real GDP 4 4 Paper plates 4 Why is real GDP a more accurate measure of an economy's production than nominal GDP? Quantity (Number of paper plates) 180 Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. O Real GDP is not influenced by price changes, but nominal GDP is. O Real GDP includes the value of exports, but nominal GDP does not. 200 180
2a. Compute the price index for each year. Use the first year as the base year. What was the inflationrate between the two years.Item Quantity Unit Price-Last Year Unit Price-This YearCoffee 20 pounds $3.00 $4.00Tuition 1 year 4,000.00 7,000.00Pizza 100 pizzas 8.00 10.00VCR rental 75 days 15.00 10.00Vacation 2 weeks 300.00 500.00
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In a country, people use only three products (Milk, Apple and Bread) for consumption. A typical basket for the country contains 10 liters of milk, 5 kg of apples and 15 packs of bread. The Price in AED of these products are given in the below table. The base year is given as 2015. Find the consumer price index (CPI) and inflation for all the years? What are the shortcomings of CPI? Year Milk per liter Apple per KG Bread Per packet 2015 10 3 2 2016 10.5 3.5 2 2017 11.5 5 3 2018 12 6 4 2019 14 7 5 2020 16 8 5