2. Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario A decrease in the price of a Rivertown Ltd. depths dredger, which is a commercial mining product used for underwater by the and multiplying by 100. Shows up in the... GDP Deflator 0 CPI 0

2. Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario A decrease in the price of a Rivertown Ltd. depths dredger, which is a commercial mining product used for underwater by the and multiplying by 100. Shows up in the... GDP Deflator 0 CPI 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For many everyday economic applications, when economists adjust nominal dollar figures for inflation, they use the CPI rather than the GDP deflator, because the CPI reflects a , whereas the GDP deflator reflects a. "all" goods and services in GDP; market basket of "all" expenditures by "urban consumers' O b. market basket of "all" expenditures by "urban consumers"; "all" goods and services in GDP Ос. "all" goods and services in GDP; representative market basket of goods and services consumed by typical "urban consumers"; O d. representative market basket of goods and services consumed by typical "urban consumers"; "all" goods and services in GDP Next page
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the However, the CPI reflects only the prices of all goods and services using using Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Scenario An increase in the price of a South Korean-made coffee maker that is popular among U.S. consumers A decrease in the price of a Smooth Streets Industries pothole puncher, which is commercial construction equipment made in the U.S. but not bought by U.S. consumers by the and multiplying by 100. Shows up in the... GDP Deflator CPI U
Table 5-2 Price of Magazines Quantity of Magazines 180 200 200 $2.00 $2.50 $3.50 Year Price of Burgers Quantity of Burgers 2017 $4.00 100 2018 $5.00 120 2019 $6.00 150 Refer to Table 5-2. Using the GDP deflator to measure the average level of prices and using 2017 as the base year, what is the economy's inflation rate? O a. 20 percent for 2018 and 30 percent for 2019 O b. 44.7 percent for 2018 and 45.5 percent for 2019 O c.25 percent for 2018 and 28 percent for 2019 O d. 20 percent for 2018 and 12.5 percent for 2019 6489a31#
2. Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI reflects only the prices of all goods and services Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Shows up in the... GDP Scenario Deflator CPI A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S. but not bought by U.s. cons consumers An increase in the price of a Japanese-made television that is popular among U.S. consumers
Solve all subparts correctly and explains
Table 2.5.4 from BEA What categories of consumption expenditures have the highest inflation rate between 2012 and 2021? Are there any categories for which prices are relatively stanle or cheaper?
Please help with the calculations.
3. 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.
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3. Suppose an economy has two years worth of data, years 1 and 2. Sup- pose there are also two goods, bread and corn. Suppose, in year one, 30 units of corn are sold at a price of 1 $ and 20 units of bread are sold at a price of 2 S. Suppose in year two, 60 units of corn are sold at a price of 1.5 $ and 80 units of bread are sold at a price of 4 $. Compute nominal GDP in both periods. Compute real GDP under both defini tions of a base year. Compute also a chain weighted real GDP series. For all three measures, compute the GDP deflator
2. Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the by the using using and multiplying by 100. However, the CPI reflects only the prices of all goods and services Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply. Shows up in the... GDP Scenario Deflator CPI An increase in the price of a German-made car that is popular among U.S. consumers A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S. but not bought by U.S. consumers Grade It Now Save & Continue Continue without saving
E. The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 shirts and 15 hotdogs. Year Price of a Price of a Shirt Hotdog 2009 $40 $3 2010 $45 $4 2011 $50 $3 1. If the base year is 2009, then the consumer price index was in 2009, 2. in 2010, 3. in 2011. 4. If the base year is 2009, then the economy's inflation rate in 2010 was percent.