B. Determine the inflation rate of Country ABC using its CPI from 2020 and 2021.Price202110,0009,0006,0008,5007,00015,0005,00020,00010,00015,000PricePriceCommodity GroupWeight202020191. Food15%2. Agriculture3. Forestry4. Crude Oil and Petroleum Products5. Steel and Metal materials6. Chemicals7. Wood, wooden materials, paper8. Education9. Ore and other raw materials10. Other manufactured goods8,0007,5007,50010,00010,00010,0004,50030,00015,00011,00011,0008,00010,00014,00015,0008,5003,00028,00013,00010,00010%8%10%15%7%5%10%10%10%

Here we are Assuming the base Year is 2020 Formula Used to Calculate cost of Basket basket= Cost of…

B. Determine the inflation rate of Country ABC using its CPI from 2020 and 2021. Price Price 2020 Price Commodity Group Weight 2021 10,000 9,000 6,000 8,500 7,000 2019 1. Food 2. Agriculture 3. Forestry 4. Crude Oil and Petroleum Products 5. Steel and Metal materials 8,000 7,500 7,500 10,000 10,000 15% 11,000 10% 8,000 10,000 14,000 15,000 8 500 8% 10% 15% Chamiele 70/ 15. 000 10.000

B. Determine the inflation rate of Country ABC using its CPI from 2020 and 2021. Price Price 2020 Price Commodity Group Weight 2021 10,000 9,000 6,000 8,500 7,000 2019 1. Food 2. Agriculture 3. Forestry 4. Crude Oil and Petroleum Products 5. Steel and Metal materials 8,000 7,500 7,500 10,000 10,000 15% 11,000 10% 8,000 10,000 14,000 15,000 8 500 8% 10% 15% Chamiele 70/ 15. 000 10.000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A country has the following statistics for 5 years: Year CPI 2012 187.5 2013 198.3 2014 150.2 2015 138.4 2016 126.5 a.) Calculate the inflation for each year (starting in 2013) b.) Do you think that the country is generally happy with the inflation rates? Why or why not?
Suppose that people in the small island country of Mudotch produce and consume rice and beans as follows. Rice Beans Year Quantity Price Quantity Price YearO 20 5 15 7 Year1 25 7 17 10 Year2 35 9 20 16 1. Calculate the consumer price index (CPI) in each year using YearO as the base year. Show your work. 2. Using your CPI in (a), what is the inflation rate in Year1 and Year2? Show your work. 3. Calculate the GDP deflator in each year using YearO as the base year. Show your work. 4. Using your GDP deflator in (c), what is the inflation rate in Year1 and Year2? Show your work. 5. Is the inflation rate in Year2 the same in (b) and (d)? Explain why or why not.
Q32
Problem Solving Question: Answer the following questions 1. Use the following information to answer the next questions. A basket of: 3 Cakes and 4 Ice Cream. Year Price of Cake Price of Ice Cream Year 1 $10 $12 Year 2 12 15 Year 3 14 18 a. Compute the Cost of the Basket for each year. b. Using Year 1 as the base year, compute the consumer index (CPI) for each year. C. Compute the inflation rates for Year 2 and for Year 3.
The average price of tuition and fees at public 4-year colleges and universities increased from $1,780 in 1989 to $7,100 in 2010. Calculate the relative change in price from 1989 to 2010 and compare it to the overall rate of inflation as measured by the Consumer Price Index. Average Annual Consumer Phc6 Ihdex (CPI) CPI 124.0 130.7 136.2 140.3 CPI 56.9 Year CPI 177.1 179.9 184.0 188.9 195.3 201.6 207.3 215.3 214.5 Year Year 2001 2002 2003 1976 1989 1990 1991 1992 1993 1994 1995 1996 1997 1977 60.6 Average tuition and fees in public 4-year colleges and universities increased by %. (Round to the nearest integer as needed.) 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 65.2 72.6 82.4 90.9 96.5 99.6 103.9 107.6 109.6 113.6 118.3 2004 144.5 2005 2006 2007 2008 148.2 152.4 156.9 160.5 163.0 166.6 172.2 2009 2010 2011 1998 218.1 1999 2000 224.9 229.6 2012
Question 4 Between 2015 and 2016, the CPI of a small nation rose from 1.82 to 1.85. If household incomes rose by 3% during that period of time, which of the following is true? O The purchasing power of household income fell between 2015 and 2016. O The purchasing power of household income rose between 2015 and 2016. O The purchasing power of household income remained constant between 2015 and 2016. O The CPI cannot be used to determine how the purchasing power of household income changes over time.
Fill in the table below Year CPI Nominal Wage Real Wage 1980 100 $6/hour ----- 1990 ----- $10/hour $8/hour 2000 150 ----- $7/hour show your calculation
Consumer Price Index (CPI), and Inflation Use the data below to answer questions 1 and 2: 2021 Base year 2022 2023 100 Loaves of bread $1.75 $2.30 $3.75 50 sticks of butter $4.80 $5.90 $7.15 1. Calculate CPI for each year. 2021: CPI 2022: CPI 2023: CPI 2. CPI in 2022 = 288.35, and in 2024 = 313.55; calculate the inflation rate between 2022 and 2024.
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
2. The inflation-unemployment relationship The following graph shows the combinations of unemployment and inflation that existed in the United States for selected years between 1961 and 1969. Click on any blue point (circle symbol) on the graph to get its exact coordinates. You can also use the black point (cross symbol) to find the coordinates of other points along the curve. (Note: You will not be graded for any adjustments made to the graph.) INFLATION RATE (Percent) 1989 5.0 4.5 1988 4.0 3.5 1967 3:0 2.5 2.0 1965 1964 1.5 1983 1961 1.0 0.5 0 3.0 3.5 40 45 5.0 5.5 6.0 8.5 7.0 UNEMPLOYMENT RATE (Percent) What happened to the inflation rate between 1965 and 1969? The inflation rate decreased from 1.9% to 1.5%. The inflation rate increased by 3 percentage points. The inflation rate decreased by 2 percentage points. O The inflation rate increased from 2.9% to 4.3%. ? If the unemployment rate had been 4.0% during the 1960s, the inflation rate would most likely have been:
Calculating inflation using a simple price index
Q28