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The
percent to two decimal places. b. Because inflation, like interest, is compounded from period to period (e.g., year to year), estimate the overall annual inflation rate per year from 2013 to 2017. Suggestion! Do not simply average the rates of part (a).
![Year Index
2013 233.0
2014 236.7
2015 237.0
2016 240.0
2017 245.1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67ba80e0-fd60-4726-b25f-3c6981c90c10%2Feb0b0683-9cb9-4f1e-b37c-843e8f0fcb96%2F83nd1sc_processed.png&w=3840&q=75)
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- "An annuity provides for 15 consecutive end-of-year payments of $73,000 in actual dollars. The general inflation rate is 5% annually, and the inflation-free interest rate is 5% annually. What is the present value of the annuity after considering the effects of inflation?"Study the associated figure. Adjusted for inflation, during which years during the period shown did the lowest gasoline prices occur? A) Gas was cheapest in 1998 - 1999 because the graph shows that the actual price of a gallon of gas was at its lowest in that time period. B) Gas was cheapest in 1998 - 1999 because the graph shows that the price of a gallon of gas in 2016 dollars was at its lowest in that time period. C) Gas was cheapest in 1980 - 1982 because the graph shows that the price of a gallon of gas in 2016 dollars was at its lowest in that time period. D) Gas was cheapest in 1950 - 1952 because the graph shows that the price of a gallon of gas in 2016 dollars was at its lowest in that time period.Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $10.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual Inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Rosa will not buy…
- Now you see what the BLS economist do, except with a more complex basket of goods. Now try to construct an index and determine the inflation rate on your own. The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? (5 points) Items Qty. 2001 2002 2003 2004 Price Amount Spent Price Amount Spent Price Amount Spent Price Amount Spent Apples 10 $0.50 $0.75 $0.85 $0.88 Bananas 12 $0.20 $0.25 $0.25 $0.29 Grapes 2 $0.65 $0.70 $0.90 $0.95 Raspberries 1 $2.00 1.9 2.05 2.13 $2.13 Total Construct the price index for a “fruit basket” in each year using 2003 as the base year. (5 points) Compute the inflation rate…Assume you make $140,000 a year. The rate of inflation in the last year was 15%. What would your salary need to be in order to compensate for inflation? Question 28 options: a) $161,000 b) $169,000 c) $155,000 d) $145,000The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period. Month April May June Price of Gas (Dollars per gallon) 2.00 60.1% Refer to Table 25-3. What is the inflation rate for May? 67.2% -4.1% 10% 3.50 3.85 Price of Milk (Dollars per gallon) 3.50 3.52 3.58
- Suppose Dina is an avid reader and buys only comic books. Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. Initially, the purchasing power of Dina's $3,000 deposit is comic books. For each of the annual inflation rates given in the following table, first determine the new price of a comic book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dina's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest comic book. For example, if you find that the deposit will cover 20.7 comic books, you would round the purchasing power down to 20 comic books under the assumption that Dina will not buy…Question 2 Part (a) Refer to the table below for a very simple economy producing three goods: education, pizzas and cars. Steel panels are needed for car production, cheese is necessary for making pizzas and projectors are used for educational service. Product Steel panels Education Cars Cheese Pizzas Projectors Quantity 40 400 400 2500 2500 4000 2017 Price $5000 $1000 $10000 $1.50 $9.00 $2000 Quantity 50 450 500 3500 3500 5000 2022 Price $6000 $1100 $12000 $1.50 $12.00 $3000 What is the nominal GDP for the economy in 2022? What was the nominal GDP in 2017? What is the real GDP in 2022 using 2017 prices as base year prices? What is the overall real GDP growth rate between 2022 and 2017? Part (b) Assume for an economy, there are 11.5 million people employed, unemployment rate is 5.2%, labor force participation rate is 64%, number of defence force personnelThe monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year (Year 1) and in the following two years. Product Pizza T-Shirts Rent Base Year (Year 1) Quantity 10 3 1 The inflation rate between Year 1 and Year 2 is The inflation rate between Year 2 and Year 3 is Price in the Base Year $3.50 $10.00 $500.00 Price in Year 2 $4.38 $9.00 $550.00 Price in Year 3 $4.73 $10.50 $600.00 %. (Round both answers to one decimal place.) %.
- The country of Panem produces only bow and arrow. Quantities and prices of these goods for the last several years are shown below. The base year is 2010. Prices and Quantities Price of Bow Quantity of Price of Quantity of Bow Year Arrow Arrow 2010 $10.00 200 $3.50 380 2011 $10.00 220 $5.00 400 2012 $11.00 250 $5.50 400 2013 $12.00 280 $6.50 440 What is the inflation rate in 2011? 8.79% 12.92% 16.67% None of the aboveThe average price of tuition and fees at private 4-year colleges and universities increased from $8,300 in 1991 to $23,000 in 2006. Calculate the relative change in price from 1991 to 2006 and compare it to the overall rate of inflation as measured by the Consumer Price Index. Average tuition and fees in private 4-year colleges and universities increased by ■%. (Round to the nearest integer as needed.) Average Annual Consumer Price Index (CPI) (1982- 1984=100) Year CPI Year CPI Year CPI 1976 56.9 1989 124.0 2001 177.1 1977 60.6 1990 130.7 2002 179.9 1978 65.2 1991 136.2 2003 184.0 1979 72.6 1992 140.3 2004 188.9 1980 82.4 1993 144.5 2005 1981 90.9 1994 148.2 2006 1982 96.5 1995 152.4 2007 1983 99.6 1996 156.9 1984 103.9 1997 160.5 2009 1985 107.6 1998 163.0 2010 109.6 1999 166.6 2011 1986 1987 113.6 2000 172.2 2012 1988 118.3 195.3 201.6 207.3 2008 215.3 214.5 218.1 224.9 229.6The CPI in 2020 was 136.2 and the CPI in 2021 was 140.1. The rate of inflation between 2020 and 2021 was approximately 3.7% was approximately 2.7% was approximately 3.9% cannot be determined from this information because the base year is unknown was approximately 2.9%
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