Q3: Suppose in UAE consists of 200 books and 290 Computers The table below shows data on prices for Books and Computers in UAE for three years. Assume that the base year is 2015. Year Price of Books Price of Computers 2014 $1.40 200 2015 $1.10 140 2016 $1.10 200 a. Given this data, what is the price of the basket in 2014? b. What is the price of the basket in 2015? C. What is the inflation rate between 2014 and 2015? d. Suppose that the nominal interest rate in UAE is 10.4%. In addition, the inflation rate is equal to 4.2%. Given this information, what is the real interest rate in UAE?

Q3: Suppose in UAE consists of 200 books and 290 Computers The table below shows data on prices for Books and Computers in UAE for three years. Assume that the base year is 2015. Year Price of Books Price of Computers 2014 $1.40 200 2015 $1.10 140 2016 $1.10 200 a. Given this data, what is the price of the basket in 2014? b. What is the price of the basket in 2015? C. What is the inflation rate between 2014 and 2015? d. Suppose that the nominal interest rate in UAE is 10.4%. In addition, the inflation rate is equal to 4.2%. Given this information, what is the real interest rate in UAE?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Eco
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