EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 36, Problem 3P
To determine
Growth rate of real GDP and inflation rate.
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Students have asked these similar questions
In Zimbabwe the rate of inflation hit 90 sextillion percent in 2009, with prices increasing tenfold every day. At that rate, how much would a $3 loaf of bread cost five days later? Hint: Use the following equation to calculate future price:
Future price = current price × inflation ratet, where t is the number of days in the future
Instructions: Round your response to one decimal place.
$ _____ million
ADVANCED: Assume the inflation rate is 100% per year and the nominal rate of interest is 700% per year. (This was also our apples example from Section 5.2.) Now, assume that there is also a 25% default rate. That is, 1 in 4 apples are returned with worms inside and will therefore not be sellable (and be worth $0). What is your real rate of return? What is the formula?
In Zimbabwe the rate of inflation hit 90 sextillion percent in 2009, with prices increasing tenfold every day. At that rate,
how much would a $2 jug of milk cost six days later? Hint: Use the following equation to calculate future price: Future
price = (current price) x (inflation rate)t, where t is the number of days in the future.
Instructions: Round your response to one decimal place.
$ million
Chapter 36 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
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