Calculate the GDP deflator and the rate of inflation for each year: (€ million) Nominal GDP Real GDP 2013 3,540,000 2,900,000 2014 4,730,000 BARAN 3,250,000 2015 5,110,000 4,800,200
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- How do you convert a series of nominal economic data over time to real terms?A consumer expenditure survey reports the following information on consumer spending: 2020 2021 Price Quantity Price Quantity Product (1) $10 7 $10 7 Product (2) $6 10 $8 12 Product (3) $12 5 $14 10 a) Using 2020 as the base year, by how much does a "cost of products" index increase between 2020 and 2021? b) Calculate the inflation rate between 2020 and 2021, using the CPI you calculated in (a)Year: 1973 1974 1975 1976 1977 1978 1979 1980 1981 O 1974 1975 O 1978 Real GDP in 2005 Dollars 1980 (Billions) 4,917 4,889 4,879 5,141 5,377 5,677 5,855 5,839 5,987 % Change from the previous year Using the above table, in which year would you expect the interest rate to be rising? 5.8 -0.6 -0.4 5.6 4.6 5.5 3.2 -0.2 2.5 Civilian Unemployment % (year's end) 4.9 5.6 8.5 7.7 7.1 6.1 5.8 7.1 7.6 Inflation Rate for the CPI (Dec. to Dec.) 6.2 11.0 9.1 5.8 6.5 7.6 11.3 13.5 10.3
- Shows the fruit prices that the typical college student purchased from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? 2. Construct the price index for a “fruit basket” in each year using 2003 as the base year. 3. Compute the inflation rate for fruit prices from 2001 to 2004.The following graph shows the approximate value of the U.s. Consumer Price Index (CPI) from September 2004 through November 2005. CPI Sep 2004–Nov 2005 I(t) 202 200 198 196 194 192 190 + 188 →t 14 4 8 10 12 Sep-04 Jan-05 Nov-05 The approximating curve shown on the figure is given by I(t) = -0.005t³ + 0.12t2 – 0.01t + 190 (0 sts 14), where t is time in months since the start of September 2004. (a) Use the model to estimate the monthly inflation rate in January 2005 (t = 4). Recall that the inflation rate is I'(t) (Round your answer to three decimal places.) I(t) % (b) Was inflation slowing or speeding up in January 2005? O slowing down O speeding up (c) When was inflation speeding up? When was inflation slowing? (Use the model to determine this.) Inflation was speeding up prior to --Select--- v 2005 and slowing after --Select--- v 2005.a) Explain why fixed-weighted measures lead to substitution bias. b) Look at the following table. What is the base year? Year CPI Nominal Income Year CPI Nominal Income 1990 41.8 400 2003 107.6 45000 1991 44.4 650 2004 109.6 50000 1992 49.3 800 2005 113.6 55000 1993 53.8 2000 2006 118.3 65000 1994 56.9 5000 2007 124 70000 1995 60.6 9000 2008 130.7 85000 1996 65.2 12000 2009 136.2 90000 1997 72.6 15000 2010 140.3 105000 1998 82.7 19000 2011 144.5 115000 1999 90.9 22000 2012 148.2 125000 2000 96.5 28000 2013 152.4 132000 2001 99.6 32000 2014 156.9 137000 2002 103.9 35000 2015 160.5 150000 c) What is the real income in the year 2012 and 2013? d) What is the percentage change in CPI between years 2012 and 2013? e) What is the percentage change in Nominal Income between years 2012 and…
- Suppose the basket of goods used for a Canadian university student price index consists of 2 terms of full-time study and 4 textbooks. Prices of the goods by year are as follows: Year Full-time tuition for Price of One one term Textbook 2018 $3,605 $115 2019 $3,631 $139 2020 $3,924 $189 a) Using 2018 as the base year, compute the university student price index for 2018, 2019 and 2020, and the inflation rate between 2018 and 2019, and between 2019 and 2020. b) Suppose that all university textbooks were produced in the United States. Would Canada's GDP Deflator increase more, less or the same rate as the student price index (based only on these two goods)?The following table shows the annual inflation rate (the GDP deflator) of Japan, the UK, China, and South Sudan in the period 1996-2015 (Source World Bank 1996-2000 2001-2005 2006-2010 2011-2015 -1.9% -0.9% Japan UK -0.5% 1.6% 2.1% 1.7% 1.8% 1.8% China 8.1% 2.4% 2.1% 0.8% South Sudan 54.1% 6.5% 0.6% -18.7% Based on this information, which of the following statements is correct? O In Sudan Price level has always decreased between 1996 and 2015 The general price level decreased in China between 1996 and 2015 O China experienced disinflation between 1996 and 2015 O in the UK, the price of goods and services remained stable between 2001 and 2015The seasonally adjusted data below depict the performance of the economy of the United States in five quarters of 1974-1975. Annual Percent Change Nominal GDP Annual Percent Change Real GDP Year/Quarter 1974/Q1 4.1 -3.4 1974/02 10.8 1.0 1974/03 8.1 -3.7 1974/04 10.6 -1.5 1975/01 4.2 -4.8 The inflation rate in the United States was lowest in which of the following quarters? Select one: OA 1974/Q1. O B. 1974/Q2. OC. 1974/Q3. OD. 1974/Q4. OE 1975/Q1.
- a) Consider the following consumption data for the economy of Ruthenia: Quantity Prices 2021 $5.55 $420 $12500 $0.36 Item Price 2022 $4.65 Pizzas 1500 Computers 120 $480 $15200 $0.44 $35 $47 Cars 39 Apples Massages Accounting Services 7800 420 $31 190 Calculate the CPI for both years as well as the inflation rate. $49The data below are from the economies of Ishgandar and Nonburmia. Ishgandar Nonburmia Year Population GDP Deflator Nominal GDP Year Population GDP Deflator Nominal GDP 1 5 100 $200 1 10 100 $300 2 5 125 $375 2 10 110 $440 (c) Calculate each of the following in Year 2. Show your work. (i) The inflation rate in Ishgandar (ii) The inflation rate in NonburmiaPerform these same calculations for 2018 and 2019, and enter the results in the following table. 2017 2018 2019 Price Cost Price Cost Price Cost Quantity in Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) Notebooks 10 20 1 3 Calculators 1 50 50 54 75 Large coffees 200 1 200 1 1 Energy drinks 100 200 4 Textbooks 10 100 1,000 120 150 Total cost 1,470 Price index 100 Suppose the base year for this price index is 2017. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2017 and 2018, the CSPI increased by Between 2018 and 2019, the CSPI increased by % Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. As the price of energy drinks increased relative to the price of coffee between 2017 and 2019, students decreased their consumption of energy drinks and increased their consumption of coffee. Professors…
