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MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter6: How Statisticians Measure Inflation

Section: Chapter Questions

Problem 6TY

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Q4)it's three subparts solve all.no skip any questions all three subparts plz

Calculate the following values with the aid of the rule.of 72
a. If the annual growth rate of real GDP is 0.5% then it will take Jyears.for a country's real GDP to double.
b. If the general price level doubles each 35 years the average annual rate of inflation is %. Enter your response rounded to1 decimal
piace.
c. If the annual population growth rate is 4% then a country's population will double approximately how many) times in 100
years. Enter your response rounded to a whole number.

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Identity several parties likely to he helped and hurt by inflation.
Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?A. More than todayB. Exactly the sameC. Less than today
More economists are_______that natural resources will eventually limit economic growth.As evidence, they note that the prices of most natural resources,adusted for overall inflation,have tended to_______ overtime.a.concerned,riseb.concerned,fallc.not concerned,rised.not concerned,fall
Most economists are _________ that naturalresources will eventually limit economic growth. Asevidence, they note that the prices of most naturalresources, adjusted for overall inflation, have tendedto _________ over time.a. concerned; riseb. concerned; fallc. not concerned; rised. not concerned; fall
Suppose that %chg(V) = -2%, %chg(M) = +10% and %chg(Y) = +3%. What is the rate of inflation? Select one: a.5% b.7% c.10% d.11%
(A) The principle of diminshing marginal return says that the return to capital is increasing over time growth is due to technkcal progress the U.S growth rate will fall over time pollution will reduce Us growth None of the above (B)The lasypayres price index (base year weights) will Overstate inflation Understate inflation cannot be calculated for the us neither understates nor overstates infation None of the above (C) In practice the us consumer price index (CPI) appears to understate inflation overstates the decline in real wages understates quality change ignores many new goods all of the above
Below data shows the economies of Gotham and Metropolis. Gotham Metropolis Year GDP deflator (or GDP Price Index) Nominal GDP Population Year GDP deflator (or GDP Price Index) Nominal GDP Population 2019 95 155 4 2019 85 160 4 2020 110 220 5 2020 110 220 5 What is the inflation rate of Gotham from 2019 to 2020? ______% (if your answer has decimal point, cut off at the first decimal point. Eg. if your calculated answer is 9.93, write your answer 9.9)
Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). Use Appendix A to answer the questions. In Year 1 the CPI was 100; 25 years later, it was 225. What was the annual rate of inflation? Round your answer to the nearest whole number. % Nancy and Pam both currently earn $110,000. If the annual rate of inflation is 4 percent, how much must each earn after eleven years to maintain their purchasing power? Round your answer to the nearest dollar.$ Your parents bought a home for $50,000 in Year 1 and sold it in Year 31 for $280,000. What was the annual rate of price increase over the 30 years? Round your answer to the nearest whole number. %
To determineThe impact of increased production without increased inflation.
Please explain this correctly I upvote Not copy paste. Q) Would you rather live in the U.S. in 1900 with an income of $1 million per year, or in the U.S. in 2020 with an income of $50,000 per year (assume we've accounted for inflation and the incomes for both years are measures in 2020 dollars)? Explain.
Suppose the residents of country P consume only peaches and pecans. The table below shows the prices and quantity of peaches and pecans consumed for two consecutive years. Note that all prices are per bushel. Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Assume 2000 is the base year. Peaches Pecans Year Price Quantity Price Quantity 2000 $11 10 $6 10 2001 $9 20 $10 10 What was the inflation rate in 2001? a. 20 percent b. 10 percent c. 8 percent d. 16.7 percent
The "Rule of 72" is a reliable guide to the impact of inflation. It is based on dividing 72 by the annual inflation rate to find out the number of years it will take the price of something to double. For example, if you bought an antique chair for $100, and the annual inflation rate is 5 percent, how long would it take for the chair to be worth $200? Using the Rule of 72, divide 72 by 5 and get 14.4. It would take about 14 years for the chair's worth to double. 1. Calculate the values below using the Rule of 72. a. If you bought a house for $150,000 and the annual inflation rate was 4 percent, how long would it take before the house, under good maintenance, would be worth $300,000? b. If you bought a Picasso painting at last week's auction for $200,000 and the annual inflation rate is 10 percent, how long would it take to double your money? c. If you went to the car show and bought a 1965 Mustang in mint condition for $25,000 and the annual inflation rate was 8 percent, when would your…

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