3. The economy of Charlotte produces three goods: hotdogs, hamburgers, and soda. The table below shows the prices and output of the three goods for the years 2019 and 2020. Laptops Hamburgers Pizza Year Price Quantity Price Quantity Price Quantity 2019 $900 10 $10 100 $15 2 2020 $1000 12 $12 105 $16 2 a. What is the cost of the CPI market basket in 2019? b. What is the cost of the CPI market basket in 2020? c. What is the CPI in 2019? d. What is the CPI in 2020? e. What is the inflation rate between 2019 and 2020?

3. The economy of Charlotte produces three goods: hotdogs, hamburgers, and soda. The table below shows the prices and output of the three goods for the years 2019 and 2020. Laptops Hamburgers Pizza Year Price Quantity Price Quantity Price Quantity 2019 $900 10 $10 100 $15 2 2020 $1000 12 $12 105 $16 2 a. What is the cost of the CPI market basket in 2019? b. What is the cost of the CPI market basket in 2020? c. What is the CPI in 2019? d. What is the CPI in 2020? e. What is the inflation rate between 2019 and 2020?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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b. Suppose that only two goods are produced in an economy. The prices in 2020 and 2021 are given in the following table: 2020 2021 Price of apples 2£ 2.1£ Price of laptops 700£ 750£ The typical basket of the country consists in the consumption of 10,000,000 applies and 30,000 computers. Calculate the CPI of the economy in 2020 and 2021 and the inflation rate in 2021.
4. In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing. Food Clothing 2021 price per unit $4 $10 2022 price per unit $6 $20 (1) What is the cost of basket in each year? (2) Compute CPI in each year using 2021 as base year.
1. In Canada, the reference base period for the CPI is 2002. By 2014, prices had risen by 25.2 percent since the base period. The inflation rate in Canada in 2015 was 1.1 percent. Calculate the CPI in Canada in 2015. 2. The base year is 2012. Real GDP in 2012 was $15 trillion. The GDP price index in 2015 was 105, and real GDP in 2015 was $16 trillion. Calculate nominal GDP in 2012 and in 2015 and the percentage increase in nominal GDP from 2012 to 2015.
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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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2. The table below shows the prices and the quantities of meat consumed in Meat-Loversville. Suppose the base year is 2003. Year 2003 2004 2005 Price of Beef Quantity of Beef 100 $2.00 $2.50 $2.75 Price of Pork Quantity of Pork 100 120 130 $1.00 $0.90 $1.00 90 105 a. Determine the values of the basket in 2003,2004, 2005. b. Determine the values of the CPI in 2003,2004, and 2005. c. What was the inflation rate for 2004? Why is the inflation rate for this year biased upward? d. Suppose that the base year is changed from 2003 to 2005. Also, suppose that the typical consumption basket was now determined in 2005. What is the new CPI for 2004? The solutions of (a) (b) (c) are given as follows,please just solve for question(d),I wii be very very appreciate!!~
Which goods are supposed to be included in the CPI? a. All goods and services produced in the economy b. All the goods, but not the services, in the consumption component of the GDP accounts c. All goods and services in the consumption component of the GDP accounts d. All goods and services that typical consumers buy