1) a.If Real GDP = $200 billion and the price index= 200, Nominal GDP is $4 billion $400 billion $200 billion $2 billion Impossible to determine since the base year is not given. b. If your nominal income rises 4 percent and your real income falls 1 percent, by how much did the price level change? 5% decrease ¼ % increase 3% increase 3% decrease 5% increase c. An increase in the CPI from 200 to 225 would indicate an annual rate of measured inflation of 1.3% 12.5% 25% 200% 225%
1) a.If Real GDP = $200 billion and the price index= 200, Nominal GDP is $4 billion $400 billion $200 billion $2 billion Impossible to determine since the base year is not given. b. If your nominal income rises 4 percent and your real income falls 1 percent, by how much did the price level change? 5% decrease ¼ % increase 3% increase 3% decrease 5% increase c. An increase in the CPI from 200 to 225 would indicate an annual rate of measured inflation of 1.3% 12.5% 25% 200% 225%
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 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...
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1) a.If Real
-
- $4 billion
- $400 billion
- $200 billion
- $2 billion
- Impossible to determine since the base year is not given.
b. If your nominal income rises 4 percent and your real income falls 1 percent, by how much did the price level change?
- 5% decrease
- ¼ % increase
- 3% increase
- 3% decrease
- 5% increase
c. An increase in the
-
- 1.3%
- 12.5%
- 25%
- 200%
- 225%
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