d. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work.e. What was the inflation rate for 2010? For 2011? Show and briefly discuss your workChapter 11Problem 8: Remember to show all work and briefly discuss your results.The table below lists the per pound prices of meat and potatoes for the months of January, February,and March. Assume that the typical consumer buys 25 pounds of meat and 15 pounds of potatoes each month, andthat January is the base period. Discuss your resultsMonthPrice of MeatPrice of PotatoesJanuaryFebruary$3.50$1.50$3.38$0.60March$4.00$1.40Calculate the cost of a basket of goods for each month.а.Calculate the consumer price index (CPI) for February and March.b.Calculate the inflation rate for February?с.What is the percentage change of price for the two goods from January to March?d.5LS

Question
Asked Oct 17, 2019
d. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work.
e. What was the inflation rate for 2010? For 2011? Show and briefly discuss your work
Chapter 11
Problem 8: Remember to show all work and briefly discuss your results.
The table below lists the per pound prices of meat and potatoes for the months of January, February,
and March. Assume that the typical consumer buys 25 pounds of meat and 15 pounds of potatoes each month, and
that January is the base period. Discuss your results
Month
Price of Meat
Price of Potatoes
January
February
$3.50
$1.50
$3.38
$0.60
March
$4.00
$1.40
Calculate the cost of a basket of goods for each month.
а.
Calculate the consumer price index (CPI) for February and March.
b.
Calculate the inflation rate for February?
с.
What is the percentage change of price for the two goods from January to March?
d.
5
LS
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d. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work. e. What was the inflation rate for 2010? For 2011? Show and briefly discuss your work Chapter 11 Problem 8: Remember to show all work and briefly discuss your results. The table below lists the per pound prices of meat and potatoes for the months of January, February, and March. Assume that the typical consumer buys 25 pounds of meat and 15 pounds of potatoes each month, and that January is the base period. Discuss your results Month Price of Meat Price of Potatoes January February $3.50 $1.50 $3.38 $0.60 March $4.00 $1.40 Calculate the cost of a basket of goods for each month. а. Calculate the consumer price index (CPI) for February and March. b. Calculate the inflation rate for February? с. What is the percentage change of price for the two goods from January to March? d. 5 LS

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Expert Answer

Step 1

(a) The cost of a basket of goods is the sum of the product of the price and quantity consumed of each good. With the provided data regarding the price and the quantity of goods consumed, the cost of a basket of goods for the month of January, February and March are $110, $93.5 and $121 respectively.

Cost of basket of goods in month of January S3.50x25+S1.50x15
=$110
Cost of basket of goods in month of February -$3.38x25+S0.60 x15
=$93.5
Cost of basket of goods in month of March $4x25+S1.4x15
= $121
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Cost of basket of goods in month of January S3.50x25+S1.50x15 =$110 Cost of basket of goods in month of February -$3.38x25+S0.60 x15 =$93.5 Cost of basket of goods in month of March $4x25+S1.4x15 = $121

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Step 2

(b) Consumer Price Index(CPI) is a measure that tells the change in the cost of basket of goods that a consumer is consuming from base year to the given year. Hence CPI for the month February and March where January is the base period are 85 and 110 respectively.

cost of basket of goods in the given period
СРI .
cost of basket of goods in the base period
x100
$93.5
x100
$110
СРI,
february
85
$121
x100
$110
CPI,
march
110
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cost of basket of goods in the given period СРI . cost of basket of goods in the base period x100 $93.5 x100 $110 СРI, february 85 $121 x100 $110 CPI, march 110

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Step 3

(c) The inflation rate (π) is the rate at which general price level of the economy increases that is the percentage ...

СР -СРI,
janruary100
Febniary CPI
Пвеау
СРІ,
january
85-100
x100
100
-15 %
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СР -СРI, janruary100 Febniary CPI Пвеау СРІ, january 85-100 x100 100 -15 %

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