uppose that in 2020, a typical U.S. student attending a state-supported college bought 10 textbooks at a price of $90 per book and enrolled in 25 credit hours of oursework at a price of $380 per credit hour. In 2021, the typical student continued to purchase 10 textbooks and enroll in 25 credit hours, but the price of a textbool ose to $110 per book, and the tuition price increased to $430 per credit hour. The base year for computing a "student price index" using this information is 2020. he value of the student price index in 2020 is (Enter your response rounded to two decimal places.)

uppose that in 2020, a typical U.S. student attending a state-supported college bought 10 textbooks at a price of $90 per book and enrolled in 25 credit hours of oursework at a price of $380 per credit hour. In 2021, the typical student continued to purchase 10 textbooks and enroll in 25 credit hours, but the price of a textbool ose to $110 per book, and the tuition price increased to $430 per credit hour. The base year for computing a "student price index" using this information is 2020. he value of the student price index in 2020 is (Enter your response rounded to two decimal places.)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 2SQP

See similar textbooks

Similar questions

Name several forms of indexing in the private and public sector.
Say that the bundle of goods purchased by a typical consumer in the base year consisted of 20 gallons of milk at a price of $1 per gallon and 15 loaves of bread at a price of $2 per loaf. What would the price index be in a year in which milk cost $2 per gallon and bread cost $1 per loaf? milk cost $3 per gallon and bread cost $2 per loaf? milk cost $2 per gallon and bread cost $4 per loaf?
Suppose that the residents of Windhoek spend all of their income on cauliflower, broccoli and carrots. In 2019 they buy 100 heads of cauliflower for N$2000, 50 bunches of broccoli for N$750 and 500 carrots for N$500. In 2020 they buy 75 heads of Cauliflower for N$2250, 80 bunches of broccoli for N$1200 and 500 carrots for N$1000. Suppose that the base year is 2019. (a) Find nominal GDP and real GDP for 2019 and 2020. (4) (b) What is the CPI in both years? (6) (c) What is the inflation rate? ( 4) (d) Find real growth rate (2) (e) Which do you think has a greater effect on the CPI: a 10 percent increase in the price of chicken or a 10 percent increase in the price of cars? Why? (4)
Assume that you borrow $5,000, and you pay back the $5,000 plus $250 in interest at the end of the year. Assuming no inflation, what is the real interest rate? What would the interest rate be if the $250 of interest had been discounted at the time the loan was made? What would the interest rate be if you were required to repay the loan in 12 equal monthly installments?
Suppose the base year bundle of goods X, Y, and Z is: (X^(b), Y^(b), Z^(b))= (5,700,60) and the base year (vector of) prices is: (Px^(b),Py^(b), Pz^(b))=(1000,5,25) The following year the (vector of) prices is: (Px^(b+1), Py^(b+1), Pz^(b+1))= (1010,5.05,27.50) 1) Compute the inflation using a Laspeyres Price Index, like the original form of the Consumer Price Index(CPI). 2) Compute the inflation index an alternative way. Calculate the price increase for each good separatelyand then take a weighted average of these price increases, using as weights the budget shares spent on eachgood in the base year. For example, for good X use weight Sx^(b)= (Px^(b)X^(b))/(Px^(b)X^(b)+ Py^(b)Y^(b)+Pz^(b)Z^(b)) Please show all work very confused
The base year in a country for the calculation of national income data is 2012. Real GDP in this country grows at the rate of 5 percent per year. The GDP deflator in this country increases at the rate of 2 percent per year. If the real GDP in this country in 2011 was 20,000 manats, what would be the value of nominal GDP in 2013? Nominal GDP in 2013 = manats. Do you know what country uses manat as its currency? Part B: The base year in a country for the calculation of national income data is 2012. Real GDP in this country grows at the rate of 5 percent per year. Nominal GDP in this country increases at the rate of 8 percent per year. If the real GDP in this country in 2011 was 50,000 tenges, what would be the value of GDP deflator in 2013? GDP deflator in 2013 = tenges. Do you know what country uses tenge as its currency?
Illustrate how we may convert actual dollars into constant dollars of the base year or vice versa?
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $7.00. In year two, the price of the same basket is $8.00. From year one to year two, there is(DEFLATION, INFLATION) at an annual rate of (1.00%, 1.25%, 1.43%, 12.50%, 14.29%) . In year one, $70.00 will buy(0.1,0.11,4.38,8.75,10) baskets, and in year two, $70.00 will buy (0.1,0.11,4.38,8.75,10) baskets. This example illustrates that, as the price level rises, the value of money (RISE, FALL, REMAINS THE SAME) .
Suppose that the residents of Windhoek spend all of their income on cauliflower, broccoli and carrots. In 2019 they buy 100 heads of cauliflower for N$2000, 50 bunches of broccoli for N$750 and 500 carrots for N$500. In 2020 they buy 75 heads of Cauliflower for N$2250, 80 bunches of broccoli for N$1200 and 500 carrots for N$1000. Suppose that the base year is 2019. (d) Find real growth rate (e) Which do you think has a greater effect on the CPI: a 10 percent increase in the price of chicken or a 10 percent increase in the price of cars? Why?
Say in a hypothetical economy, people consume only two goods – nasi lemak premium and shoes. The market basket of goods used to compute the CPI has 40 units of nasi lemak premium and 15 units of shoes. Nasi Lemak Premium Shoes 2010 price (in RM) 12 10 2011 price (in RM) 20 20 a)How much have prices changed for nasi lemak premium and shoes over the one-year period? b)Suppose the base year was 2005 and total expenditures for the base year was RM500. Calculate the inflation rate. c)Do these price changes affect all consumers the same way? Explain.
Suppose the nominal interest rate is 10 percent, the tax rate on interest income is 28 percent, and the inflation rate is 6 percent. Then the after-tax real interest rate is -3.2 percent
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. Initially, the purchasing power of Cho's $3,000 deposit is 200 movie tickets. When the rate of inflation is equal to the interest rate on Cho's deposit, the purchasing power of her deposit __________over the course of the year. Select one of the following: A. Rises B. Remains the Same C. Falls