Assume that S, = 1.60 USD/GBP. How will this spot rate djust according to PPP if the United Kingdom experiences an inflation rate of 5% while the U.S. experiences an %3D nflation rate of 39%2
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- The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.Suppose you borrow $1,000 of principal that must be repaid t the end of two years, along with interest of 5 percent a year. If the annual inflation rate turns out to be 10 percent, Hint: Future value = Present value x (1 + Growth in prices), where t is the number of years evaluated. Real value of loan repayment Amount of loan x (1 + Real interest rate) Instructions: Round your responses to the nearest whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the real rate of interest on the loan? % b. What is the real value of the principal repayment? c. Who loses, the debtor or the creditor? Debtor O CreditorThe following represents the inflation rates of foreign country X for the past 5 years: Year 1: 35% Year 2: 20% Year 3: 25% Year 4: 30% Year 5: 15% Which statement is correct about the selection of a functional currency for country X at the end of year 5. a. Country X is highly inflationary; the US dollar must be used b. Country X is highly inflationary; the foreign currency must be used c. Country X is not highly inflationary; the US dollar must be used d. Country X is not highly inflationary; either the US dollar or the foreign currency may be used depending on the factors to determine the functional currency e. Country X is not highly inflationary; the foreign currency must be used
- You lend $1,012 to a friend and he agrees to pay you back next year plus he will pay you interest of 7.25%. If the inflation rate is 2.18%, then in real terms how much extra money will you have after your friend pays you back? Enter a number rounded to two decimal places with no other characters.'UK inflation remained unchanged at 2.8 per cent for the second month in a row, according to official data released on Tuesday. The Office for National Statistics data showed fast rising prices for audio-visual equipment, books, newspapers and stationery in the 12 months to March kept consumer price inflation high. Smaller rises in prices for furniture and furnishings and motor fuels, and lower prices for alcohol contained inflationary pressures. A new measure of consumer price inflation which includes housing costs was also unchanged from February, remaining at 2.6 per cent.' The extract describes an example of... (please state A,B,C or D in the answer) A: constant inflation B: decreasing inflation C: increasing inflation D: zero inflationThe Consumer Price Index (CPI) of one particular country can be modeled by I(t) =-0.043f3 +0.99t² +1.00t+564 (0 < t < 10) where t is time in months since the start of January 2015. What was the inflation rate in July 2015 (t 6)? Round your percent to 2 decimal places.
- A man deposited his first paycheck of $2000 into a long-term savings account at a bank at an interest rate of 12% in 1951 as a gift to his future grandchild. Assume a steady inflation rate of 8%. If his grandchild withdraws that money today in 2021, how much actual money did they withdraw? How much purchasing power would this withdrawal have in 1951?In Zimbabwe the rate of inflation hit 90 sextillion percent in 2009, with prices increasing tenfold every day. At that rate, how much would a $2 jug of milk cost six days later? Hint: Use the following equation to calculate future price: Future price = (current price) x (inflation rate)t, where t is the number of days in the future. Instructions: Round your response to one decimal place. $ millionAutomobile insurance policies (contracts) typically are issued every 6 months. Consider an actual case during the tail part of 2018 where a policy was worth approximately $649. In March of 2019 the issued policy is projected to be approximately $700. Note that these costs are somewhat high. What is the rate of inflation in these policies over this time period? 2. Los Angeles, CA and Atlanta, GA (ATL baby!!!) are two of the most well-known cities in the U.S. These cities are also very large (with LA being the larger of the two). Given that the number of people in the labor force was 6,827,958 (LA) and 3,097,603 (ATL), and the number of people out of work for Atlanta was 110, 713 and for LA was 285,764, what was the rates of unemployment for these two cities for December 2018? 3. Here are some data for numbers of people in the labor force for some cities in the U.S.: Columbia, SC (400,750); Jacksonville, FL (775,809); Charlotte, NC (1,343,634), and Charleston, SC (379,429). What…
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