Suppose that the price level in Canada was 100 in 2007, 105 in 2008, 110 in 2009, and 115 in 2010. Over this time period, O a) the inflation rate was positive O b) the inflation rate increased Oc) the inflation rate decreased O d) hyper inflation occurred
Q: At full employment, the expected inflation rate is A. higher than the inflation rate O B. equal to…
A: Full employment refers to an economic condition in which all available labour resources are being…
Q: Suppose a person receives a 9% increase in pay when inflation is 8%. In this case, the nominal…
A: Answer: Given, Increase in pay = 9% Inflation = 8% An increase in pay is a nominal increase. Thus…
Q: If nominal interest rate is 20% and real interest rate 11% in the economy, what is the inflation…
A: The inflation rate is the rate at which the prices of products and services decline in the economy.
Q: If the CPI has a value of 150 today and the base year is 2000, then it costs Select one: O a. €l…
A: Answer is given below
Q: If the Consumer Price Index changes from 118 in the year 2009 to 127 in the year 2011, the average…
A: Measurement of consumer goods and services, such as transportation, food, and medical care, is known…
Q: Suppose the consumer price index (CPI) accurately measures inflation, and: In 1983 the CPI in the…
A: The inflation rate is the percentage change in difference between the consumer price index of the…
Q: If inflation is higher than anticipated, benefit(s) and if inflation is lower than anticipated,…
A: When actual inflation is higher than expected inflation, borrowers (debtors) benefit and lenders…
Q: In millions Civilian population 150 People incapable of working 20 People not looking for work 30…
A: Answer: Unemployment rate: the unemployment rate is the ratio of the unemployed population to the…
Q: What would $15,000 earned in 2017 be equal to in 2021? The CPI is for the two years are 150.3 and…
A: Given, Wage earned in 2017 = $15000 CPI in 2017 = 150.3 CPI in 2021 = 240.5
Q: Suppose the cost of the basket in Year 3 was $4,000 and the cost of the basket in the base year…
A: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket…
Q: If the CPI is 109 one year and 112 the next, the annual rate of inflation as measured by the CPI is…
A: Inflation is the situation when the economy grows due to an increase in the circulation of money…
Q: With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest…
A: Answer: A (7 percent) Explanation: The interest rate in case of anticipated inflation of 3% is given…
Q: Suppose the cost of the basket in Year 3 was $4,000 and the cost of the basket in the base year…
A: Inflation measures the percentage(%) change in purchasing power(PP) of a particular currency. As the…
Q: What determines a country's long run average Inflation rate? Select one: O a. The rate of inflation…
A: In an economy, the functioning and the importance of economic variables changes in the long-run, as…
Q: Between October 2001 and October 2002, the CPI in Canada rose from 116.5 to 119.8 and the CPI in…
A: CPI = It is the index of the average price of a basket of goods and services bought by the consumer…
Q: Question 11 Madelynne F. deposits $1,000 in a savings account that pays an annual interest rate of 4…
A: PLEASE FIND THE ANSWER BELOW.
Q: If you currently make $25,000 a year and the CPI rises from 110 today to 150 in five years, then you…
A: Inflation refers to the increase in the price level in an economy from one period to another.…
Q: If the CPI increases from 135 in 2006 to 154 in 2007, the rate of inflation between 2006 and 2007…
A: CPI can be used to calculate the inflation between two period of time given the formula of…
Q: QUESTION 21 In 2011, a toy drone could be bought for $15 each. The same drones are available today…
A: CPI is measured using fixed basket of goods.
Q: f inflation is higher than anticipated, benefit(s) and if inflation is lower than anticipated,…
A: Inflation refers to the economic factors that will provide information about the actual purchasing…
Q: The inflation rate between last year and this year was 14 percent. The CPI was 118 this year. What…
A: Consumer price index(CPI): - it is a measure of change in the price level, it measures the change in…
Q: The unemployment rate at full employment is O a. equal to the rationed rate of unemployment. O b.…
A: Full employment = Natural rate of unemployment Natural rate of unemployment = Frictional +…
Q: If the inflation rate is 7% per year, how many years will it take for the cost of something to…
A: Inflation is the rise in average general price level over period of time . Inflation is bad for…
Q: When the price level the inflation rate A. rises rapidly; increases O B. falls; is zero O C. rises…
A: The inflation rate is the percentage change in the average level of prices over a period of time.
Q: QUESTION 17 In an imaginary economy of Tealand, the CPI in 2015 was 130 and the inflation rate was…
A:
Q: Suppose that the rate of inflation is reduced from six to one percent. Over this time, the…
A: The sacrifice ratio is a ratio that implies an effect on the total output or GDP of a nation due to…
Q: In 1980, inflation as measured with the PCE, reached just over O 5% O 19% O 8% O 11%
A: Personal Consumption Expenditure (PCE) Measure household expenditures define for a specific time…
Q: The CPI in 1990 was 131, and the CPI in 2010 was 218. If you earned a salary of $40,000 in 1990,…
A: CPI captures the change in the cost of a particular basket of goods & services, in a year as…
Q: Suppose, you are lending money to your friend Julia and you want a real rate of return of 6.50%.…
A: The formula for calculating normal interest rate is: Nominal interest rate = real interest…
Q: Assume that an economy has the following population data: Total adults over age of 16 year: 243…
A: Number of people unemployed = Total Population in Labor Force - Total Employed Population = 155…
Q: For this question, assume that the expected rate of inflation is a function of past year's…
A: The Phillips curve shows the trade-off between inflation and unemployment. in keeping with…
Q: Assume that John has a car loan with a nominal interest rate of 4%. If the actual inflation rate is…
A: Inflation is outlined as a rise within the value of most everyday or common merchandise and…
Q: The persons who are laid off when a supermarket closes because the manager did not run the business…
A: When the economy do not work at its potential level because of inefficiency or downturn in Economic…
Q: Which one of the following is NOT true about the costs of inflation to society? O Unexpected higher…
A: Inflation: - it is the phenomenon of an increase in the prices of goods and services in an economy.
Q: Suppose that the total expenditures for a typical household in 2000 equaled $4,000 per month, while…
A: A consumer price index estimates changes in the value level of a weighted normal market basket of…
Q: Suppose a person receives a 5% increase in pay when inflation is 4%. In this case, the nominal…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: In Germany, banks are paying a positive interest rate on peoples' savings, as a result O a. Savers…
A: Lower rates of interest discourage people from making savings while higher rates of interest…
Q: High and uncertain inflation is damaging to the economy because... O a. There can be unexpected…
A: Inflation refers to an increase in the general price level in an economy over a period of time.…
Q: Suppose that the consumer price index at year-end 2008 was 140 and by year-end 2009 had risen to…
A: Consumer price index(CPI): - it is a measure of change in the price level, it measures the change in…
Q: Which of the following would impose the greatest costs to society? O a. stable rates of inflation O…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: 40. Year CPI 2006 100 2007 136 the rate of inflation for 2007 is О а. 36% O b. 3.6% O . 63% O d.…
A: 1) The rate of inflation is given as Rate of inflation in 2007= [(CPI2017-…
Q: The Boskin Congressional Advisory Commission reported that the CPI overstated inflation by O 11…
A: Boskin Advisory Congressional commission was appointed in 1995 by US. The main aim of the commission…
Q: When the unemployment rate is equal to its natural rate-that is, no cyclical unemployment exists-the…
A: Unemployment rate refers to the percentage of labour force that is unemployed. Unemployment occurs…
Q: Table 6.2 Year CPI 150 154 152 156 160 Refer to Table 6.2. If a worker earned $40,000 years ago when…
A: The formula is: Adjustment to salary to keep up with inflation =(Salary in the year / CPI of the…
Q: Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had…
A: We know that the real interest rate is equal to nominal interest rate minus inflation rate. Real…
Q: When economists speak of the CPI bias, they are referring to O A. the tendency for the CPI to…
A: Consumer Price Index shows the weighted average value of a basket of goods. CPI calculated by the…
Q: The price index was 140 in one year and 148.4 in the next year. What was the inflation rate? 8.4…
A: Inflation is the consistent rise in general price level over period of time . And inflation reduce…
Q: If the population of a country is 1,000,000 people, its labor for consists of 500,000, and 40,000…
A: Gradually we can say that unemployment refers to the situation in which actually people are…
Q: If the input cost adjustment process works very slowly so that actual output differs from potential…
A: Actual output refers to growth that has occurred in real life, whereas potential output refers to…
Q: 19) The term inflation is used to describe a situation in which the overall level of prices and…
A: Inflation is the macroeconomic variable as it sees the change in economy level. Change in inflation…
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- Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2∕800, where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $20 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40. Explain. Suppose, instead, that inflation is expected to increase the firm’s labor cost and output price by identical (percentage) amounts. What effect would this have on the firm’s output? A- Increase B- Decrease C- No EffectSuppose 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. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Cho's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Cho will not buy seven-tenths of a movie ticket. Number of tickets Cho can purchase options:…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. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Cho's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Cho will not buy seven-tenths of a movie ticket. Fill in the annual inflation chart Choices…
- Suppose Latasha is a cinephile and buys only movie tickets. Latasha deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. 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 $10.00. Initially, the purchasing power of Latasha's $3,000 deposit is_______ movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Latasha's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the…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 stepSuppose Dina is an avid reader and buys only comic books. Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. Initially, the purchasing power of Dina's $3,000 deposit is comic books. For each of the annual inflation rates given in the following table, first determine the new price of a comic book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dina's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest comic book. For example, if you find that the deposit will cover 20.7 comic books, you would round the purchasing power down to 20 comic books under the assumption that Dina will not buy…
- Suppose Amy is an avid reader and buys only comic books. Amy deposits $4,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. For each of the annual inflation rates given in the following table, first determine the new price of a comic book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Amy's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Round your answers in the first row down to the nearest comic book. For example, if you find that the deposit will cover 20.7 comic books, you would round the purchasing power down to 20 comic books under the assumption that Amy will not buy seven-tenths of a comic book. Annual Inflation Rate…Assume that the annual rate of inflation is expected to be 4 per cent per annum for the next five years. Also assume that the required rate of return of 14 per cent you employed above is a market determined rate and incorporates an allowance for the expected rate of inflation of 4 per cent. Explain how you would take the expected rate of inflation into account in a revised analysis.32. Suppose a person receives a 5% increase in pay when inflation is 4%. In this case, the nominal increase is__________ , the real increase is ____________, If the employee overestimates the real gain, this would be an example of___________. O. 9%, 4%, price confusion O. 5%, 1%, sticky wages O. 5%, 1%, employee misperceptions O. None of the other choices listed is correct. O. 5%, 4%, shoe leather costs 33. It is known that the method used by the BLS to calculate the U3 unemployment rate biases the results, All of the biases tend to cause the reported U3 statistic to be lower than what it really is. O. True O. False
- Suppose Neha is a sports fan and buys only baseball caps. Neha deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a baseball cap is priced at $10.00. Initially, the purchasing power of Neha's $3,000 deposit is$______________baseball caps. For each of the annual inflation rates given in the following table, first determine the new price of a baseball cap, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Neha's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest baseball cap. For example, if you find that the deposit will cover 20.7 baseball caps, you would round the purchasing power down to 20 baseball caps under the assumption that…Please just do question 4 please 3) Suppose that on January 1, 2019 a bank lends $20,000 to a person. The bank and the individual both agree that the real interest rate charged on the loan should be 10% and the loan is going to be totally paid ($20,000 plus interest), in a one-time payment, on December 31, 2020. Suppose the two parties to this transaction can perfectly foresee what the inflation rate for this period is going to be. Given this information, what is the nominal rate the Bank has to charge on this loan? Assume that the CPI is computed at the beginning of each year. According to US inflation data: The historical average CPI for 2019 is - 255.657 The historical average CPI for 2019 is - 258.811 The inflation rate during the period is: (258.811/255.657 -1) *100 = 1.233% Real Interest Rate = Nominal Interest Rate – Expected Inflation Nominal Interest Rate = Real Interest Rate+ Expected Inflation Nominal Interest Rate = 10% + 1.23% Nominal Interest Rate…CPI inflation in India rose to 4.9% y-o-y in November from 4.5% in October, below expectations (5.1%), with a downside surprise in food and fuel price inflation, but core inflation rose further to 6.1% from 5.9%, signalling rising underlying price pressures. The cut in excise duties on fuel was offset by higher price increases in personal care, clothing, recreation and households goods and services in the CPI basket, suggesting pressures due to rising input cost pass-through and reopening. In this context, suppose people in India anticipate an increase in the expected price level. a) Determine whether the event shifts aggregate demand (AD) or aggregate supply (AS). b) Use the AD-AS model to determine the short-run and long-run effects on India’s GDP, price level, and unemployment.