Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 16, Problem 6CQQ
To determine
Calculation of nominal and real interest rate.
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You deposited $2,000 in a savings account,and an year after you have $2,100.Meanwhile the CPI rises from 200 to 204.In this case ,the nominal interest rate is ________percent,and the real rate interest is________percent.
a.1,5
b.3,5
c.5,1
d.5,3
Consider the following basket of student essentials:
2019 2020
Burritos $6.30 $6.60
Pizzas $9.90 $10.00
Movie Tickets $10.00 $10.50
Energy Drinks $4.99 $5.99
a. Using 2019 as the base year, what is the CPI in 2019?
b. Assume students buy 30 burritos, 25 pizzas, 15 movie tickets, and 200 energy drinks each year. What is the CPI in 2020 using 2019 as a base year? What is the inflation rate? Would this rate be higher or lower if students bought more energy drinks?
A low price level induces consumers
to save, which drives down the interest
rate.
9. In 1970, Mr. Sami earned $12,000; in
1980, he earned $24,000; and in 1990,
he earned $36,000. If the CPI was 40 in
1970, 60 in 1980, and 100 in 1990, then
in real terms, Mr. Sami's 's salary was
highest in *
O 1980 and lowest in 1990.
1990 and lowest in 1980.
1980 and lowest in 1970.
1990 and lowest in 1970.
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Chapter 16 Solutions
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
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