Q23 MCQ Two factors that complicate the calculation of the inflation rate are: a) substitution and quality/new product bias b) preferential bias c) complimentary product bias d) consumer behavior bias
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Q23 MCQ
Two factors that complicate the calculation of the inflation rate are:
- a) substitution and quality/new product bias
- b) preferential bias
- c) complimentary product bias
- d)
consumer behavior bias
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- Average inflation rate is _______ the values of the highest and lowest individual inflation rates A. always lower B. always higher C. sometimes within D. sometimes twice E. always within F. sometimes higherEstablish the equivalent equation to find the average inflation rate?Two factors that complicate the calculation of the inflation rate are: Question options: a) complimentary product bias b) substitution and quality/new product bias c) preferential bias d) consumer behaviour bias The basket of goods in the Consumer Price Index consists of about _________ products; that is, several hundred specific products in over__________ broad-item categories. Question options: a) 800; 200 b) 80,000; 400 c) 200; 800 d) 80,000; 200
- The following represents the inflation rates of foreign country X for the past 5 years: Year 1: 35% Year 2: 20% Year 3: 25% Year 4: 30% Year 5: 15% Which statement is correct about the selection of a functional currency for country X at the end of year 5. a. Country X is highly inflationary; the US dollar must be used b. Country X is highly inflationary; the foreign currency must be used c. Country X is not highly inflationary; the US dollar must be used d. Country X is not highly inflationary; either the US dollar or the foreign currency may be used depending on the factors to determine the functional currency e. Country X is not highly inflationary; the foreign currency must be usedTwo factors that complicate the calculation of the inflationrate are: a)complimentary productbias b)substitution andquality/new product bias c)preferential bias d)consumer behaviorbiasHow can we calculate the average general inflation rate from the base period?
- True or False : Inflation is a genuine issue for retirement planning because a person age 65 will on average live between 18 and 20 years and the cost of goods can double over that period of timeThe average inflation rate is calculated on the basis of the CPI for all the items in the market basket. True or false?Due to the integrated nature of their capital markets, investors in both the U.S. and U.K. require the same real interest rate, 3.2%, on their lending. There is a consensus in capital markets that the annual inflation rate is likely to be 2.1% in the U.S. and 3.6% in the U.K. for the next three years. The GBP/USD rate is currently 1.3081. What is your expected future spot for GBP/USD three years from now? (X.XXXX)
- In order to make up for the future loss in purchasing power. the rate at which you earn interest must be sufficiently higher than the anticipated inflation rate. True or false?As an innovative way to pay for various software packages, a new high-tech service company has offered to pay your company, Custom Computer Services (CCS), in one of three ways: (1) pay $400, 000 now, (2) pay $1, 000, 000 5 years from now, or (3) pay 5 equal annual installments of $140, 000. If you, as president of CCS, expect to earn a real interest rate of 1/9 ~ 11.11% per year when the inflation rate is 12.5% per year, which offer should you accept? Justify your answer by showing that equivalent value of each option at some common point in time. Please explain wellThe future amount of P100,000 for a period of 8 years is equal to P341,655.49. Considering money is worth 10% per year with an inflation rate of "x " per cent per year, find the value of inflation rate.
