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- How to Measure Changes in the Cost of Living introduced a number of different price indices. Which price index would be best to use to adjust your paycheck for inflation?Why do you mink the U.S. experience with inflation over the last 50 years has been so much milder than in many other countries?With in 1 or 2 percentage points, what has the U.S. inflation rate been during the last 20 years? Draw a graph to show the data.
- 2. Differentiate an Internal Rate of return with that of an External Rateof Return.find the value of sales if :- GVAFC = 120 Change in stock = - 80 Purchase of raw material = 400 Excise duty = 50 Sales tax = 30 All values are in dollar millionWhich would be more difficult to forecast 10 years fromnow: the number of 60-year-olds or their average disposable income? Why?
- Supposethat on January 1 2009, the TL price of thedollar is 1.40 overtheyear, inflation rate in Turkey is 25 % and U.S. inflation rate is 10%. Iftheexchange rate is $1= 1.50 TL at theend of theyear, whichcurrencyappearto be overvalued.?Explain your answer.If the nominal rate of interest is13.94 %and the real rate of interest is7.3 %what is the expected rate of inflation?Which of the following describes the interest rate on an investment after calculating the impact of inflation?O NominalO RealO FinancialO Profit
- In 1981, twin sisters were each given an inheritance of $10,000. one sister( Abby) placed her inheritance in an index fund in the stock market that earned her an average annual return of 9% over thenext 40 years. The other sister( Gabby) invested her money in a series of certificate of deposit accounts(CD's). For the first 20 years, Gabby was able to make average annual returns of 5% investing in CD's, but the second 20 year period, she earned annual returns of only 3%. Assume that inflation averaged 3.5% annually for this 40 year analysis period. a) How many actual dollars does Abby have today? b) How many actual dollars does Gabby have today? c) How many real 1981 based dollars does Abby have today? d) How many real 1981 based dollars does Gabby have today? e) What is the increased buying power that Abby has today as compared to 1981? f) What is the increased buying power that Gabby has today as compared to 1981?KA. 10.9)At an international meeting of consumer advocates for price control, a comparison of CPI growth was made to understand the cost increases that inflation imposes on citizens in the United states, Mexico, and turckey. The annual CPI percentages are shown for 2 years a)If the base spending level for the year 2016 was set at $1000 per household in each country for comparison purposes, develop a table and graph of the resulting costs for 2017 and 2018. b) what is the percentage difference in 2018 between the united states and Turkey? CPI Value, % year USA Mexico Turkey 2017 2.10 6.77 11.92 2018 1.90 4.83 20.30What is net factor income from Abroad(NIFA).