Table 2 shows the CPI and nominal interest rate of Singapore from 1990 to 2000. For each year beginning with 1991, calculate the rate of inflation and the real interest rate. Year CPI (Urban) | Nominal interest rate (%) Rate of Inflation (%) | Real interest rate (%) 1990 222 9.80 1991 233.3 7.83 1992 253.4 7.56 1993 294.2 9.54 1994 1995 367.8 429.6 10.98 10.98 9.07 1996 467.4 1997 481.9 7.02 1998 479.0 4.99 1999 472.8 2.89 2000 476.6 2.25 Explain what happened to inflation rate over the 1990s.

Table 2 shows the CPI and nominal interest rate of Singapore from 1990 to 2000. For each year beginning with 1991, calculate the rate of inflation and the real interest rate. Year CPI (Urban) | Nominal interest rate (%) Rate of Inflation (%) | Real interest rate (%) 1990 222 9.80 1991 233.3 7.83 1992 253.4 7.56 1993 294.2 9.54 1994 1995 367.8 429.6 10.98 10.98 9.07 1996 467.4 1997 481.9 7.02 1998 479.0 4.99 1999 472.8 2.89 2000 476.6 2.25 Explain what happened to inflation rate over the 1990s.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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This table gives the monthly purchases of an average consumer in a small economy. Suppose 1977 is the reference base period unless stated otherwise. Item Quantity (1977) Clementines Burritos Bags of trail mix 90 Price (1977) 30 $0.10 $2.00 10 $1.00 $2.00 Find the total cost of the market basket for 1977 and 1978. Price (1978) What is the CPI in 1977 and 1978? $0.15 $2.25 Use the CPIs calculated in part b to find the inflation rate between 1977 and 1978. Recalculate the CPIs using 1978 as the base year. How does the inflation rate change?
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