Consider an economy that produces and consumes shoes and houses. In the table below are data for two different users.   2000 2001 Price of a house $120,000 $145,000 Number of houses produced 1000 1050       Price of a pair of shoe $150 $170 Number of pairs of shoes produced 650,000 525,000 Year 2000 Year 2001 Price of a house $120,000 Price of a pair of shoes $150 $170 Number of houses produced 1,000 Number of pairs of shoes 650,000 525,000 Calculate the rate of inflation for 2001 using the CPI.Calculate the GDP deflator for both years. Calculate the rate of inflation for 2001 using the GDP deflator

Question

Consider an economy that produces and consumes shoes and houses. In the table below are data for two different users.

  2000 2001
Price of a house $120,000 $145,000
Number of houses produced 1000 1050
     
Price of a pair of shoe $150 $170
Number of pairs of shoes produced 650,000 525,000

Year 2000 Year 2001 Price of a house $120,000 Price of a pair of shoes $150 $170 Number of houses produced 1,000 Number of pairs of shoes 650,000 525,000


Calculate the rate of inflation for 2001 using the CPI.Calculate the GDP deflator for both years. Calculate the rate of inflation for 2001 using the GDP deflator.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Inflation

Related Economics Q&A

Find answers to questions asked by students like you.

Q: A publisher faces the following demand schedule for the next novel from one of its popular authors:P...

A: Table, The total revenue =TR = P*Q The marginal revenue = MR = Change in TR /Change in Q At P = 90,...

Q: How to calculate the labour force participation rate?  Please provide formula Labour force: 140,00 W...

A: The labour force participation rate estimates the portion of a country’s working-age a population th...

Q: 99. In Macroland, a country that operates according to Okun's law, real GDP is $9.6 trillion, the ac...

A: When the economy is below full employment, the actual rate of unemployment is more than the natural ...

Q: Let’s assume that a country in the Caribbean reports the following labour statistical data to its ci...

A: We are going to calculate labor force and working age population ratio to answer this question.

Q: Consider an economy that produces and consumes shoes and houses. In the table below are data for two...

A: CPI is measured using fixed basket of goods. 

Q: Question 1 The M1 definition of the money supply includes all of the following EXCEPT Select one: a....

A: M1 is the most liquid form of money supply. This includes Currency in circulation, travellers checks...

Q: For each of the following scenarios, state whether the unemployment is frictional, structural or cyc...

A: (a) Unemployment is defined as a situation or condition in which a person which is capable and willi...

Q: Solve the attachment

A: The monetary policy is implemented using the tools of interest rates, open market operations, and ch...

Q: Question No.4          a) The U.S. currently has seven federal income tax brackets, with rates of 10...

A: Click to see the answer

Q: Question: Define different types of costs. Explain Fixed and Variable costs with the help of example...

A: Types of cost in short run Fixed Costs (FC) It is the cost of fixed factors.The costs which don’t ch...

Q: Let’s assume that a country in the Caribbean reports the following labour statistical data to its ci...

A: a) Unemployment rate = (Number of unemployed/ Labor force)*100 The number of unemployed are the peop...

Q: Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrU...

A: The utility function, U(x,y) = xb10y1-b10 If b = 8, the function is  U(x,y) = x810y1-810U(x,y) = x45...

Q: C                      I                         G                               NX              Pri...

A: Nominal GDP = C + I + G + NX Nominal GDP in the year 1 = 1000 + 156 + 560 +52                       ...

Q: Nominal GDP, PY, is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation...

A: Given: Nominal GDP (PY) = $7.5 trillion Quantity of Money = $3 trillion The velocity of circulation ...

Q: Mr Brown has recently been retrenched. The firm he worked for had to retrencha number of staff due t...

A: Frictional unemployment is the one that takes place from the unavoidable delays in time during findi...

Q: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550   Q.2.5 Calculate what the n...

A: Given : C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550  

Q: Consider the following extract and then answers the questions that follow: How SA's recession is imp...

A: Recession: In financial matters, a downturn is a business cycle compression when there is an overall...

Q: You are supposed to analyze and discuss the effect on the equilibrium output and the price in the Te...

A: Market is in equilibrium at the point where th demand and supply of the good is equal. The price and...

Q: C = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf = 1550Calculate the tax revenue to the ...

A: Answer: Given: C=450+0.4YI=350G=150X=70Z=35+0.1YT=0.15YYf=1550 Calculation: (1). To calculate the ta...

Q: Fill in the Value of Money column in the following table. Quantity of Money Demanded Price Level (P)...

A: 1 divided by price level is the value of money. The value of money at each price level is shown in b...

Q: What type of unemployment does each of the following represent? Explain your answers.Q.6.1 Workers a...

A: An economy may experience different kinds of unemployment due to differences in the reason behind an...

Q: If real GDP per capita in the United States is $8,000, what will real GDP per capita in the United S...

A: Given information: Real GDP = $8,000 Growth rate = 3.2% Number of years = 5

Q: If TC = 321 + 55Q - 5Q2, then average total cost at Q = 10 is:

A: Given, TC = 321 + 55Q - 5Q2

Q: Solve (d) parts onlys.  Q) In the country of Kwaki, people fish for salmon and grow corn. In one yea...

A: Gross domestic product (GDP) refers to the total value of all the final goods and services that prod...

Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run comp...

A: In the long run the firm will make zero economic profit. As new firms enter the market the demand cu...

Q: Assume Tea brands ChotooChai and BaraChai are competing brands in the market. With arrival of winter...

A: Demand and supply model: Demand and supply is a financial aspect, the connection between the amount ...

Q: 60. In a perfectly competitive market, which of the following will increase the economic profit the ...

A: As the demand increases, the demand curve shifts towards right and will intersect the original suppl...

Q: Explain, with the aid of a graph, the demand‐pull inflation. In your answer, consider the following:...

A: Inflation is defined as an increase in the general price level of an economy. The main causes of inf...

Q: Would the imposition of a price ceiling for mask due to covid 12 be an effective solution to the sho...

A: In economics, the price of a given product is determined at a point where demand and supply are equa...

Q: You are provided with the demand and supply curves for bottles of apple juice. $14 $12 Supply $10 $8...

A: Answer - Given in the question - The price floor of $10 per bottle of apple juice  The Deadweight lo...

Q: Since 1982, banks and thrift institutions have offered a type of savings account that yields a marke...

A: The saving accounts which have no minimum maturity are known as certificate of deposits (CDs) 

Q: 10. An industry currently has 100 firms, each of which has fixed cost of $16 and average variable co...

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the f...

Q: Which of the following is an investment? Select one: a. the purchase of a share of stock by a hou...

A: Which of the following is an investment? Select one: a. the purchase of a share of stock by a hou...

Q: Explain three policies that can be implemented by Government to improve the accuracy of labour force...

A: Answer - 1. Properly defined labor force :- Government should define proper guideline for labor forc...

Q: Consider a firm that utilizes Labor (L) and Capital (K) to produce a product Q, and the technology i...

A: Iso-quant curve show the different possible combinations of input that produces the same level of ou...

Q: 68. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’...

A: Answer to the question is as follows :

Q: Monthly Unemployment 2014 – 2015 Year Jan Feb Mar Apr May Jun Jul Aug Sep Oc...

A: i) The unemployment rate in the economy decreases both in the year 2014 as well as in the year 2015....

Q: The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose thatthe total...

A: Given, P = Rs. 10  TC = 1000+2Q+0.01Q2  

Q: Question 19.19.  A state government wants to increase the taxes on cigarettes to increase tax revenu...

A: Taxes are the required payments to the government without expecting any direct return or profit to t...