Suppose an economy consumes only two goods: food and entertainment. The following table shows quantities consumed and prices for three years: Year 0 (the base year), Year 1, and Year 2. QUESTION; compute inflation rates (from year 0 to year 1 and from year 1 to year 2) based on GDP deflator Item Year 0 Year 1 Year 2 Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Food 50 5 75 6 80 4 Entertainment 100 12 110 11 115 14
Suppose an economy consumes only two goods: food and entertainment. The following table shows quantities consumed and prices for three years: Year 0 (the base year), Year 1, and Year 2. QUESTION; compute inflation rates (from year 0 to year 1 and from year 1 to year 2) based on GDP deflator Item Year 0 Year 1 Year 2 Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Food 50 5 75 6 80 4 Entertainment 100 12 110 11 115 14
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 3.7P
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Question
Suppose an economy consumes only two goods: food and entertainment. The following table shows quantities consumed and prices for three years: Year 0 (the base year), Year 1, and Year 2.
QUESTION; compute inflation rates (from year 0 to year 1 and from year 1 to year 2) based on
Item |
Year 0 |
Year 1 |
Year 2 |
|||
Quantity (units) |
Price ($ / unit) |
Quantity (units) |
Price ($ / unit) |
Quantity (units) |
Price ($ / unit) |
|
Food |
50 |
5 |
75 |
6 |
80 |
4 |
Entertainment |
100 |
12 |
110 |
11 |
115 |
14 |
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