Measured real wages understate living standards because O The CPI overstates growth Wages ignore paid vacations etc. which have increased over time Wages ignore fringe benefits which have increased over time All of the above.
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- Need help with this. Thanks! 3. This year Anjun's monthly pay rose from $1000 (last year's rate) to $1100 (this year's rate). During the year the inflation rate for consumer products was 12%. A. What happened to Anjun's nominal income? (up or down, and by what percent?) B. What happened to Anjun's real income? (up or down and by what percent?As a result of a drought, prices and produced quantities in a country change as follows: Assume that the economy produces and consumes only the above agricultural products.a) Calculate the nominal GDP and the real GDP for the year 2021 with the base year 2020.b) By how many percent have the prices of goods increased?c) Calculate the CPI for the year 2021 according to Laspeyres and Paasche.d) Describe the general differences between the CPI and the GDP deflator.WRITE DOWN DIFFERENCES BETWEEN CPI AND SPI WITH REFRENCE TO PAKISTAN. DEFINE IMPLICIT PRICE DEFLATOR WRITE FORMULA TO CALCULALTE IT. DEFINE PRODUTIVITY AND DESCRIBE FOUR DETERMINANTS OF PRODUCTIVITY.
- The consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. Calculate the price index of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2018, 2019, and 2020. Calculate the percentage change in index between 2018 and 2019 and again between 2019 and 2020. What is rate of inflation/deflation between 2019 and 2020? GOOD QUANTITY CONSUMED 2018 PRICES 2019 PRICES 2020 PRICES X 100 Rs. 10.00 Rs.10.50 Rs. 10.75 Y 150 Rs. 10.50 Rs. 20.00 Rs. 20.00 Z 25 Rs. 30.00 Rs. 30.25 Rs. 30.00 In each case of following cases, does the increase in prices affect CPI, GDP deflator, or both in Pakistan? Analyze and Justify your answer. (Maximum 150 words) The price of imported Belgian chocolate has increased. The price of imported equipment used in industrial level ice-cream production has…The calculation of the CPI and PPI relate to the GDP deflator in that both a) are values used to measure different aspects of inflation b) of these economic indicators require economists to calculate the natural rate of unemployment first C) values increase/decrease based on variations in per capita GDP d) only pertain to calculations of changes in nominal interest ratesThe effects of inflation are seen in: a)goods, services, wages and income levels b)goods and servicesonly c)wages and incomelevels only d)services and wages only
- a country has the following nominal GNP and output data: If the base year is determined as 20I1, then: a. Calculate data on prices, real GNP, Price Index, Inflation Rate, and Economic Growth Ratevfrom 2010 to 2014! b. Give the conclusion from the calculation of your Economic Growth Rate!Question 1Evaluate how each of the following individuals would be affected by unanticipated inflation:a) A department store clerkb) A heavily indebted farmerc) A private pensionerQuestion 2a) What is the Consumer Price Index (CPI)?b) Consider an economy that produces and consumes shoes and houses. In thetable below are data for two different users.Year2000Year2001 Price of a house $120,000 $145,000Price of a pair of shoes $150 $170Number of houses produced 1,000 1,050Number of pairs of shoes 650,000 525,000(i) Calculate the CPI for both years.(ii) Calculate the rate of inflation for 2001 using the CPI.(iii) Calculate the GDP deflator for both years.(iv) Calculate the rate of inflation for 2001 using the GDP…If nominal GDP increases by 5 percent a year and the GDP price index rises by 2 percent a year, then real GDP increases by _______. A. 2.5 percent a year B. 3 percent a year C. 7 percent a year D. 10 percent a year
- Suppose that the nominal GDP in 2017 was $3,968 (in thousands) and 2018 is the base year. Nowthe nominal GDP for years 2018 and 2019 will be the sum of the nominal GDP of the previousyear and the cost-of-living adjustment (COLA.) for the current year. [COLAs per year are equalto the percentage increase of the rate of inflation.] When we calculate the nominal GDP this way,what is this economy’s real GDP each year?Given that the CPI for 2016 is 100, (a)Compute the CPI inflation rates for the years 2017 and 2018. (b)(i) Determine the percentage change in GDP deflator for 2016-2017 and 2017-2018. (ii) Compare your results in (i) above with your answers in (a) and justify. [ (c)Explain three problems associated with using CPI to measure cost of living. (d)State any two logical information you can infer about the hypothetical economy described above. (e)The government in 2018 announced and implemented a 10 percent increase in the nominal salary of an average public servant from Gh¢500 in 2017. Does the salary of an average public servant have more purchasing power in 2017 or 2018? (f)Briefly describe the concept of ‘rebasing’. Explain how rebasing affects the income and cost of living estimates of a country.Suppose the consumer price index (CPI) in 1983 was 100. In 1994, the CPI was 150. In 1994, a bank teller's annual salary was $22,000. The same job paid $16,000 in 1983. After adjusting for inflation, the real salary of bank tellers a. Increased by more than the rate of inflation b. Decreased between 1983 and 1994 c. Remained the same between 1983 and 1994 d. Increased between 1983 and 1994 e. The inflation rate was around 33.3% between 1983 and 1994.
