What is the inflation rate in 2019? Has it increased or decreased since 2018 and by how much? If the nominal interest rate in 2019 is 7%, what would be the change in purchasing power of $1,000 deposited in January 219 by the end of the year? Please explain if it has increase or decreased since 2018 and by how much? also what if inflation rate was higher then purchasing power?
What is the inflation rate in 2019? Has it increased or decreased since 2018 and by how much? If the nominal interest rate in 2019 is 7%, what would be the change in purchasing power of $1,000 deposited in January 219 by the end of the year? Please explain if it has increase or decreased since 2018 and by how much? also what if inflation rate was higher then purchasing power?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 28CTQ: Why do you mink the U.S. experience with inflation over the last 50 years has been so much milder...
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- What is the inflation rate in 2019? Has it increased or decreased since 2018 and by how much? If the nominal interest rate in 2019 is 7%, what would be the change in
purchasing power of $1,000 deposited in January 219 by the end of the year?
Please explain if it has increase or decreased since 2018 and by how much? also what if inflation rate was higher then purchasing power?
Expert Solution
Introduction
Inflation rate in 2019 = Percentage increase in GDP Deflator from 2018 to 2019.
Inflation rate in 2018 = Percentage increase in GDP Deflator from 2017 to 2018 .
Real interest rate =Nominal interest rate - Inflation rate.
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