If the price index in year 1 is 146 and in year 2 is 163, the rate of inflation between year 1 and year 2 is: Selected Answer: В. 8.2%. Answers: A. 15.0%. В. 8.2%. C. 11.64%. D. 10.43%.
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- Suppose the base year bundle of goods X, Y, and Z is: (X^(b), Y^(b), Z^(b))= (5,700,60) and the base year (vector of) prices is: (Px^(b),Py^(b), Pz^(b))=(1000,5,25) The following year the (vector of) prices is: (Px^(b+1), Py^(b+1), Pz^(b+1))= (1010,5.05,27.50) 1) Compute the inflation using a Laspeyres Price Index, like the original form of the Consumer Price Index(CPI). 2) Compute the inflation index an alternative way. Calculate the price increase for each good separatelyand then take a weighted average of these price increases, using as weights the budget shares spent on eachgood in the base year. For example, for good X use weight Sx^(b)= (Px^(b)X^(b))/(Px^(b)X^(b)+ Py^(b)Y^(b)+Pz^(b)Z^(b)) Please show all work very confusedSuppose you know that cumulative inflation for the period 1926 2010 was 12.34. You also know that the geometric mean for Treasury bills for this period was 3.6 percent. What was the real return for Treasury bills for the period 1926 2010?10. Under the following conditions, estimate the price of an item during year 3 A. If it is estimated that its price at the beginning of the analysis is $8.50 and suffers an inflation of 5.5% per year. B. If it is estimated that its price at the beginning of the analysis is $8.50 and it suffers an inflation in year 1 of 3%, in year 2 of 5% and in year 3 of 2%. C. If it is estimated that its price in the first year of the analysis will be $8.50 and it suffers an inflation of 5% per year. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- A. Find the real value of your 40,000 salary for each of the next three year's. year1? year2? year3? b. If you have a cola in your contract, and the inflation rate is 5 percent, what is the real value of your salary for each year? year1? year2? year3?Suppose that all prices rise at the same proportional (inflation) rate of 19% per year. For an item that currently costs P0, find the nominal price of a) a 20 kg bag of corn, presently costing $16, after five years; b) a $4.40 can of coffee after ten years; c) a $250,000 house after four years please explain step by stepThe CPI inflation rate from 1982 to 2002 is ________ and from 2002 to 2022 is ________. The difference in the rates of inflation is ________. A. 46.9 percent; 33.7 percent; -13.2 percentage points B. 46.9 percent; 33.7 percent; -28.1 percentage points C. 88.4 percent; 50.9 percent; -42.4 percentage points D. 88.4 percent; 50.9 percent; -37.5 percentage point
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $7.00. In year two, the price of the same basket is $8.00. From year one to year two, there is(DEFLATION, INFLATION) at an annual rate of (1.00%, 1.25%, 1.43%, 12.50%, 14.29%) . In year one, $70.00 will buy(0.1,0.11,4.38,8.75,10) baskets, and in year two, $70.00 will buy (0.1,0.11,4.38,8.75,10) baskets. This example illustrates that, as the price level rises, the value of money (RISE, FALL, REMAINS THE SAME) .Assume that the economy has an annual inflation rate of 5 percent. Are the following investments profitable in real terms? You do not need to explain your answer. (a) A$1,000 face-value bond, which you purchase at a 30% discount, that pays a monthly coupon of$4. (b) A$1 million house the increases in price by$45,000 per year. You do not rent out the house, nor do you undertake renovations. (c) A$1 million house that you renovate for$45,000 over the course of a year, causing the price to increase to$1.1 million. (d) The spot price of silver is$31 per ounce. You purchase 50 ounces of silver for$1,600, in order to compensate the merchant. Over the year, the spot price of silver rises to$34per ounce, and you are able to sell the silver you have at the spot price. (e) You purchase a Non-Fungible Token (NFT) for$98 million. The following year, you are able to sell it for$102.5 millionIf the price index in 2017 is 132 and the price index in 2018 is 114, the rate of inflation between 2017 and 2018 is -5.8% 15.8% 6.4% -13.6%
- Suppose you have $400 and the inflation rate is 4 percent. In order to earn a real return of $20 on your investment, the nominal interest rate must be OA. 1 percent. B. 5 percent. C. 9 percent. D. 12 percent. ...Suppose you purchase a $1,500 TIPS on January 1, 2020. The bond carries a fixed coupon rate of 5.5 percent. Over the first two years, semiannual inflation is 1.5 percent, 1.5 percent, 4 percent, and 3 percent, respectively. What is the principal at the end of month 6?Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Cho's $3,000 deposit is 200 movie tickets. When the rate of inflation is equal to the interest rate on Cho's deposit, the purchasing power of her deposit __________over the course of the year. Select one of the following: A. Rises B. Remains the Same C. Falls
