If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan’s: (2) (a) Real and nominal income both remain unchanged; (b) Real and nominal income both rise; (c) Real income rises but nominal income remains unchanged; (d) Nominal income rises but real income remains unchanged.

If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan’s: (2) (a) Real and nominal income both remain unchanged; (b) Real and nominal income both rise; (c) Real income rises but nominal income remains unchanged; (d) Nominal income rises but real income remains unchanged.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Macroeconomic Measurements, Part I: Prices And Unemployment

Section6.1: Measuring The Price Level

Problem 3ST

See similar textbooks

Similar questions

The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.
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.
Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the CPI to convert from nominal to real would be more appropriate man using the GDP deflate:
Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the GDP deflator to convert from nominal to real would be more appropriate than using the CPI.
If the inflation rate is 6% and Susan receives a 6% increase in income, then, overthe year, Susan’s: (a) Real and nominal income both remain unchanged; (b) Real and nominal income both rise; (c) Real income rises but nominal income remains unchanged; (d) Nominal income rises but real income remains unchanged.
Assume that a market basket necessary for consumption by a typical household in the economy consists of 300 sandwiches and 3 iPads. In year 2017 the price for one sandwich was $4, and the price of one iPad was $150. In year 2018, the price for one sandwich was $5, and the price of one iPad was $200. Assume that for our analysis we consider year 2017 as the base year. What is the rate of inflation from year 2017 to year 2018? a) 127.27% b) 27.27% c) 20% d) 75%
If the inflation rate is 6% and Susan receives a 6% increase in income, then, overthe year, Susan’s: choose the correct answer(a) Real and nominal income both remain unchanged; (b) Real and nominal income both rise; (c) Real income rises but nominal income remains unchanged; (d) Nominal income rises but real income remains unchanged
Q1 An economy produces only 2 final goods: hamburgers and bicycles. In 2019, 1000 hamburgers were produced and sold at £8 per unit, while 200 bicycles were produced and sold at £200 per unit. In 2020, 800 hamburgers were produced and sold at £8.20 per unit, while 225 bicycles were produced and sold at £230 per unit. Using this information, the aggregate inflation rate for this economy between 2019 and 2020 is: досто + 40000 A. 56.9% B. 40.0% C. 42.2% D. 25.0%
If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan's: (a) Real and nominal income both remain unchanged; (b) Real and nominal income both rise; (c) Real income rises but nominal income remains unchanged; (d) Nominal income rises but real income remains unchanged. Given the import function, Z = 300 + 2/3Y, which of the following statements is correct? (a) The marginal propensity to save is 1/3; (b) The induced component is 300; (c) 2/3 is the proportion of any income spent on imports; (d) None of the statements is correct. An increase of R5 billion in income in a macroeconomy leads to an increase in R3 billion in consumption spending. From this information, we can determine that the marginal propensity to save in this economy is: (a) 0.6; (b) 0.5; (c) 0.3; (d) 0.4.
Q7. Suppose that your annual income (nominal) in year 1 is $45,000, and in year 2 is $51,232. If the CPI in year 1 is 143.6, and in year 2 is 150.7, a) Has your real income increased, decreased, or remain unchanged? Explain your answer. b) What is the inflation rate between the two years?
Consider a simple economy that only produces: pencils, t-shirts, and bananas. Using the information in the table below, calculate the inflation rate for 2020, as measured by the consumer price index. Product Pencils T-shirts Bananas 1.9% 1.1% O-1.1% 1.5% O-1.9% Quantity 8 15 5 Base year price (2010) $2 $5 $1 Price (2019) $3 $7 $1.50 Price (2020) $3.50 $6.75 $1.75
Assume all household consumption items are locally produced as shown in thetable in Question (a). A typical household in the economy consumes 5 units ofrice, 4 units of shirt and 2 units of shoes in 2018. Using 2018 as the base year,measure the CPI for 2019 and 2020 and the inflation rate between 2018 and 2019,and also between 2019 and 2020. Explain why the inflation rate is different fromthose computed from (a)(ii).