Consider an economy that produces and consumes bread and automobiles. In the following table are data for two different years. Year 2000 2010 Price of an automobile $40,000 $50,000 Price of a loaf bread $20 $30 Number of auto-mobiles produced 100 cars 120 cars Number of loaves of bread produced 600,000 loaves 500,000 loaves

Q: What is  the difference between interest rates and inflation rates? Give an example of each.

A: Interest Rate and Inflation rate are different from each other. Inflation is the rise in the general…

Q: When a nominal value increases it must be true that prices have increased. Select one: True False

A: Nominal value: face value of an asset or security.

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A: The Philips curve depicts the relationship between the inflation and unemployment rates.  The…

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A: Inflation rate is the percentage change in average price level of goods and services.

Q: Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college…

A: CSPI is an important indicator for inflation in an economy, inflation erodes the value of money,…

Q: You can use a price index to study the buying habits of individuals? True or false

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Q: The interest rate in the US is 7%. Use the Fisher effect to find the Canadian interest rate.

A: The objective of the question is to find the Canadian interest rate using the Fisher effect and the…

Q: Since 1960 there has been a substantial increase in unemployment rates in major European countries.…

A: The unemployment refers to the phenomenon in which the people who are willing to work at the…

Q: When a nominal value is unchanged it must be true that prices have remained unchanged. Select one:…

A: Introduction: Nominal Value: It is the value or price of the commodity that does not include…

Q: You have data for real output y, price level P, and the nominal wage W at two distant dates (time t…

A: According to the data on real output  y, price level p, and nominal wage W at two distinct time…

Q: On March 5, 2013, the Dow Jones Industrial Average set a new high. The index closed at 14,253.77,…

A: Index closed=14,253.77Movement in a day=125.95Now,Index opened=Index closed-Movement in a dayIndex…

Q: How can I find the Consumer Price Index

A: Introduction The Consumer Price Index (CPI) represents as a measure for the general level of prices…

Q: The strength of a company according to the SWOT analysis chart can never be a weakness for the firm.

A: Within the context of a SWOT analysis, strengths and weaknesses pertain to internal elements or…

Q: Why is price “stickiness” or “rigidity” important for understanding macroeconomic adjustments? How…

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Q: The UN Food and Agriculture Organization (FAO) has developed a Food Price Index that shows that food…

A: Food and Agriculture Organization (FAO): The FAO conducts research, gives technical assistance to…

Q: Describe the Adjusted-discount method?

A: An estimate of the present cash value for high risk investments is called risk-adjusted discount…

Q: Research suggests that macroeconomic factors can explain the dynamics of interest rates in the…

A: Inflation rate is the rate at which the price level increases over the period of time.  The interest…

Q: Define the term future inflation?

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Q: Make an inflation rate forecasts graph based on the description. I need help please. Based on…

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A: The formula is: Value in x year dollars =value in y year dollarCPI of y year dollar×CPI of x year…