Q: Calculate the GDP deflator and the rate of inflation for each year: (€ million) 2013 2014 2015…
A: The GDP deflator monitors price changes across all goods and services produced in a nation.The GDP…
Q: A researcher finds that, for an economy, the nominal GDP in the year 2015 equaled the nominal GDP in…
A: GDP refers to the value of all final goods and services produced in an economy over a given period…
Q: The nominal income of the population increased by 20% over the year, and the consumer price index…
A: Real Income is the Income of an individual after accounting for the inflation how much money will be…
Q: Suppose that the prices of capital goods (goods purchased by firms as investment) rose. How would…
A: In an economy, capital goods at ethe goods that are produced and consumed for the long-run.
Q: alculate the real interest rate if Nominal Interest rate is 3% and inflation rate is 1%
A: # We know that the real interest rate is given by the difference between the nominal interest rate…
Q: Explain briefly what the CPI measure and how it is constructed. Identify one reason why the CPI is…
A: There are various price indices which measure the change in price in the economy. For example, gross…
Q: what is ? 1-)Nominal Interest Rate 2-)Real Interest Rate 3-)Labor Force
A: The Nominal Interest rate (i) is the interest rate when inflation is not taken into account. This…
Q: Exercise 4.1 You have the following annual data for an economy: Consumer price index (2007=100) Year…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Why is it difficult to measure an economy’s real rate of interest?
A: Real interest rate refers to the interest rate that adjusted with the inflation. Real interest rate…
Q: If national income is $5,000 billion, compensation of employees is $2,105 billion, proprietor’s…
A: National income: - national income is the market value of all final goods and services produced in…
Q: Why is the Consumer Price Index likely more relevant to your own personal economic situation as…
A: For a product to be manufactured, cost is important and when cost is initiated, then process of…
Q: Briefly discuss the most important differences between the calculation of the CPI and the GDP…
A: The most important difference between Consumer Price Index (CPI) and the GDP deflator is that CPI…
Q: i Find the nominal GDP for the current year and base year. ii What is the percentage increase in…
A:
Q: If the nominal interest rate is 5 percent and the inflation rate is 2 percent, then what is the real…
A: The interest rate is the amount paid for the money for not using for the purpose of consumption in…
Q: nominal rate of interest and what is the real rate of interest
A: The inflation depicts the rise in level of prices. The inflation is of different types: Creeping…
Q: In an economy, the inflation rate and real interest rate are 1.8% and 3% Find nominal interest…
A: Answer in step 2
Q: If the nominal interest rate on an asset is 10% and inflation is also 8%, what is the real interest…
A: The nominal interest rate is the percentage increase in money you pay the lender for the use of the…
Q: What is inflation? How can we measure it? What are the differences between inflation based on CPI…
A: inflation is a term that refers to the increase in the general price level of most services and…
Q: Describe the difference between nominal interest rate and real interest rate?
A: In economics, interest rate is classified as nominal interest rate and real interest due to the…
Q: Describe the GDP deflator and how it is used to measure inflation
A: Deflator is a value that allows data to be measured over time in terms of base period, so as to…
Q: Can you give an example of the answer for the cpi. I am confused on what they are asking.
A: Suppose the 5 products are apple, guava, orange, melon and kiwi.
Q: In 2014, Apple’s revenue was $183 billion, and it grew to $267 billion in 2018. a. What is the…
A: Real growth rate is the growth rate adjusted for inflation. CPI is used to measure inflation rate.
Q: The monthly market basket for consumers consists of pizza, t-shirts, and rent The table below shows…
A: Consumer price index is used to compute the inflation rate in a specific year when comparing to the…
Q: Exercise 4.1 You have the following annual data for an economy: Year Real GDP Employment Consumer…
A: Unemployment=Labor Force-EmploymentUnemployment Rate=UnemploymentLabor Force×100
Q: What is the relationship between GDP, inflation, and CPI?
A: It is important to understand what these terms are: GDP: It is the value of the production of all…
Q: The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows…
A: The cost of price index (CPI) is a measure used to estimate the price changes in a basket of goods…
Q: Alyssa spends all of her money on comic books and mandarins. In 2014, she earned $27.00 per hour,…
A: Nominal value of a variable is measured in relation with money. Real value is measured in terms of…
Q: Which of the following is an example of a nominal variable? A.) Output B.) Employment…
A: There are two types of variables Macroeconomics is concerned with, nominal and real variable.
Q: Briefly explain how the CPI index summarizes all the prices in the economy by using a single number.
A: The purpose of CPI indexes is to summarize the information on all the prices of the multiple goods…
Q: 10 - : What do we get if we divide the nominal GDP value for a certain period in a country by the…
A: Nominal GDP is the market value of all the final goods and services produced within the borders of…
Q: What are the definitions of nominal?
A: Nominal is a concept used in finance that has many different definitions. In the first case, it…
Q: In an economy the nominal interest rate is 6% and the inflation is 4%. Calculate real interest rate
A: Following are the given values: Nominal interest rate = 6% Inflation rate = 4%
Q: Do you think a negative nominal interest rate can happen? What about a negative real interest rate?…
A: When people borrow money from the lender, a proportion of the amount borrowed is paid additionally…
Q: What is the correlation between CPI and GDP? How does it affect each in a positive way? What is…
A: Relating the Consumer Price Index to the GDP price index and the GDP implicit price deflator U.S.…
Q: The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows…
A: Consumer price index can be defined as an instrument to measure inflation.changes in measured CPI…
Q: Suppose you compare your income this year and last year and find that your nominal income fell but…
A: Nominal income refers to the income received by an individual whereas real income also takes…
Q: In the economy, Nominal Interest rate is 2% and real interest rate is 1.5% Calculate inflation
A: We are given that:- Nominal interest rate = 2% Real interest rate = 1.5% We need to calculate…
Q: Suppose that nominal GDP is $10,622 billion and real GDP is $12,070 billion. What is the value of…
A: Answer: Given: Nominal GDP=$10,622 billion Real GDP= $12,070 billion To find: GDP price index…
Q: WHich of the following is a NOMINAL variable? a.Price level b.Unemployment c.Investment…
A: The nominal value of the variable in economics is the value that is static and that is calculated to…
Q: The monthly market basket for consumers consists of pizza, t-shirts. and rent The table below shows…
A: here we calculate the CPI of the following years which are as follow-
Q: In 2018, the real interest rate was 6% and inflation was 1.2% Calculate nominal interest rate
A: The information being given is:- Real interest rate = 6% Inflation rate = 1.2% This is the data for…
Q: What is the difference between nominal and real variables? Give two examples of each.
A: In economics, a nominal variable is one which is measured at current prices i.e. the prices of the…
At the beginning of the year, what is the nominal rate of interest and what is the real rate of the interest?
Interest rate is the percentage amount charged by the lender from the borrower to use his money for a certain period.
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- Suppose your annual nominal income for the next four years is $78,500, and the annual inflation rate is 7.1%. Calculate the real value of your $78,500 salary at the end of the fourth year.If the annual inflation rate in an economy is i, then $1 borrowed at the beginning of a year will have the same purchasing power as ________ dollars at the end of the year. i (1/i) (1 − i) (1 + i)Suppose the CPI in year 1 is 137. Given that the inflation rate is 0.3% in year 2 and 4.2% in year 3, how much does it cost at the end of year 3 to purchase the same goods and services that cost 260 at the beginning of year 1.
- You are given a loan with a nominal interest rate of 5%. You must pay back this loan one year from now. Over the next year inflation is at 4%. In real terms what is the effective interest rate you must pay the loan back at after adjusting for inflation?1.As the inflation rate increases, the present value of a fixed payment receive in the future a) decreases b) stays the same c) increases 2. As the opportunity cost of your funds increases, the future value of a payment received today a) decreases b) stays the same c) increasesSuppose that the inflation rate during a year is 5 per cent. During that year, you deposited $500 in your bank account and received an annual nominal interest rate of 10 per cent. What is the real purchasing power of your deposit at the end of the year? $500 $550 $525 $523
- Suppose you want to earn a real interest rate of 5%. For inflation rates of 0.0, 1.0, 2.0, …, 9.0, 10.0, 15.0, 20.0, and 50.0%, determine the combined rate of interest you must earn.Find the real interest rate prevailing if inflation is 2% and Nominal Interest rate is 3 times the inflation rateAbhijit deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Abhijit withdraws his $105. If inflation was 7 percent during the year the money was deposited, then Abhijit’s purchasing power has increased by 2 percent. Select one: True False
- Find the inflation rate in the economy if the real interest rate is 4% and Nominal Interest rate is 10%Assume the nominal rate of return is 8.63% and the real rate is 4.68%. Find the inflation rate of return using the exact formula.You know that the CPI is 110.2 in year 3, and the inflation rate from year 2 to year 3 is 1.3%. What is the inflation rate from year 1 to year 2 if year 1 is the base year ?