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- Which of the following is an example of a nominal variable? A.) Output B.) Employment C.) Prices D.) Physical capitalWhich of these statements is true about inflation? a.It is always based on the prices of exports b.It is calculated by comparing local prices with imported products c.It shows changes in the general prices of goods and services d.It compares the relative changes of prices of agricultural and technological productsGive an example of a good or service that has increased in price since the time when you were young. Describe the good or service and tell us what price the good cost when you were young compared to today. Calculate the percentage change in price (the inflation rate for the good in question) over the time period you are describing.
- In macroeconomics, how can you tell when someone has worked too hard or too little during a period of inflation? Please answer numerically and graphically.If the consumer price index (CPI) says that inflation equaled 10% last year, then the chained CPI for urban consumers is likely to say that inflation equaled 9.7% last year. a) True b) FalsePlease explain this correctly I upvote Not copy paste. Q) Would you rather live in the U.S. in 1900 with an income of $1 million per year, or in the U.S. in 2020 with an income of $50,000 per year (assume we've accounted for inflation and the incomes for both years are measures in 2020 dollars)? Explain.
- ← Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of $1,905 in 1989 and that the CPI index was 116 in 1989. If the CPI index was 223 in 2009, then the cost of tuition in 2009, as the result of inflation, would equal $ Suppose that the actual average cost of tuition in 2009 was $7,058. Relative to the expected cost computed above, the cost of tuition increased by (Enter your response rounded to the nearest whole number.) the amount of inflation.The first two columns of the table below describe the goods and quantities included in your current monthly consumption. Suppose you have been able to use all of your monthly income (no savings) to afford this level of fixed consumption over the last few years despite the increase in the cost of living. • Round all expenditure calculations to the nearest dollar. • Round CPI and inflation (expressed as an integer) to 1 decimal place. • Carry your rounded figures throughout the rest of the problem. 2018 2019 2020 Basket Prices Prices Item Prices Quantities Meal Kit Delivery $106.00 8 $107.00 $110.25 $48.25 $50.00 $46.00 $53.00 Water 16 Hydro Electricity 14 $56.90 $58.75 Dry cleaning $62.00 10 $64.75 $68.00 Entertainment $26.00 17 $28.75 $32.80 Part (a): Using the quantities specified in the 2018 basket of goods, calculate the CPI for 2018, 2019 and 2020. Part (b): What is the inflation rate between 2018 and 2019? 2019 and 2020? Part (c): Suppose inflation is expected to remain constant…The CPI might overstate inflation because consumers may shift consumption to cheaper alternatives. Which bias is this associated with? unmeasured quality variety of goods import bias substitution bias
- Now you see what the BLS economist do, except with a more complex basket of goods. Now try to construct an index and determine the inflation rate on your own. The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? (5 points) Items Qty. 2001 2002 2003 2004 Price Amount Spent Price Amount Spent Price Amount Spent Price Amount Spent Apples 10 $0.50 $0.75 $0.85 $0.88 Bananas 12 $0.20 $0.25 $0.25 $0.29 Grapes 2 $0.65 $0.70 $0.90 $0.95 Raspberries 1 $2.00 1.9 2.05 2.13 $2.13 Total Construct the price index for a “fruit basket” in each year using 2003 as the base year. (5 points) Compute the inflation rate…If the GDP deflator rose from 106.2 in 1998 to 112.3 in 2000, what was the rate of inflation?If economic growth occurs with demand increasing faster than supply, then Select one: a. Price level will decrease b. Price level will not change c. Price level will rise d. nominal wage will fall
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