The nation of X City produces and consumes two goods: educational services and pizza. Use the following table to answer the questions below: Educational Services Pizza Year Quantity Price Quantity Price 2010 2 $2,500 250 $10 2015 4 $3,500 300 $12 2020 5 $3,200 400 $15 a) Using a method similar to the CPI and using 2010 as the base year, suppose the standard consumer basket is 1 unit of educational services and 100 pizzas, construct a consumer price index for this economy. What is the CPI for 2010, 2015, and 2020? b) What was the average annual inflation rate between 2010 and 2020 according to the CPI? c) Using a method similar to the GDP deflator and using 2010 as the base year, construct the GDP deflator for this economy. d) What was the average annual inflation rate between 2010 and 2020 using the GDP deflator? e) is the inflation the same between 2015 and 2020 using the CPI

The nation of X City produces and consumes two goods: educational services and pizza. Use the following table to answer the questions below: Educational Services Pizza Year Quantity Price Quantity Price 2010 2 $2,500 250 $10 2015 4 $3,500 300 $12 2020 5 $3,200 400 $15 a) Using a method similar to the CPI and using 2010 as the base year, suppose the standard consumer basket is 1 unit of educational services and 100 pizzas, construct a consumer price index for this economy. What is the CPI for 2010, 2015, and 2020? b) What was the average annual inflation rate between 2010 and 2020 according to the CPI? c) Using a method similar to the GDP deflator and using 2010 as the base year, construct the GDP deflator for this economy. d) What was the average annual inflation rate between 2010 and 2020 using the GDP deflator? e) is the inflation the same between 2015 and 2020 using the CPI

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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