EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 36, Problem 9RQ
To determine
Expected rise in wages of workers.
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"If the consumer price index was 102 in the base year and 117 in the following year, the
inflation rate was"
O 15 percent.
14.7 percent.
7 percent.
O 1.07 percent.
Assume that John has a car loan with a nominal interest rate of 4%. If the actual inflation rate is 3%,
then the real rate is
3%
4%
O 7%
O 1%
11. Suppose that the GDP deflator of a small country equals 200 at the end of 2018. If the inflation rate is 10% in 2019 and 5% in 2020, what is the value of the GDP deflator at the end of 2020? (round your answer to the nearest whole number)
O. 215
O. 221
O. 231
O. 235
12. Most business economists and analysts prefer to use measures of "core" inflation, which typically remove which of the following volatile components?
O. Energy
O. Food
O. Housing
O. Energy and Food
Chapter 36 Solutions
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- Table 24-2 The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of peaches and 10 bushels of pecans. Year Price of Peaches 2012 $11 per bushel 2013 $9 per bushel O 1.04 percent. 10 percent. Price of Pecans Refer to Table 24-2. If 2012 is the base year, then the inflation rate in 2013 was O 23.5 percent. O 4.4 percent. $6 per bushel $10 per bushelarrow_forwardAs of July 2012, the 12 month CPI inflation rate was 1.4 percent and the 12 month core CPI inflation rate was 2.1 percent. The difference between these two measurements of inflation indicates Select one: O a. prices for food and fuel grew more rapidly than prices for other goods. O b. prices for food and fuel grew less rapidly than prices for other goods. c. hyperinflation. O d. the underlying inflation rate was lower than the overall inflation rate. Next page me bere to searcharrow_forwardSuppose that the consumer price index at year-end 2008 was 140 and by year-end 2009 had risen to 154. What was the inflation rate during 2009? 7.1 percent 10 percent O 14.2 percent O 9.1 percentarrow_forward
- Question 2 The GDP deflator in year 4 is 120 and the GDP deflator in year 5 is 130. The rate of inflation between years 4 and 5 is O -10%. O 7.7%. O 8.33%. O 10%.arrow_forwardGood Price in 2015 Price in 2016 A $2.10 $2.25 $5.10 $5.80 C $3.05 $2.90 Consider the prices of three goods as given in the table above. Who is likely to feel like the inflation rate is higher? O Someone who buys 10 units of A. 10 units of B, and 5 units of C O Someone who buys 2 units of A, 1 unit of B. and 2 units of C O Someone who buys only good C O Somcone who buys 10 units of A. 5 units of B. and 10 units of C « Previous Next C ASUS 13 14 15 f6 f9 f10 f11 B.arrow_forwardMoving to another question will save this response. estion 10 Cold Turkey policy is believed to be the most inefficient anti-inflation policy. TRUE or FALSe? O TRUE FALSE Moving to another question will save this response. #bike 2 bike 2.jpg bike.jpg 101°F Sunny esc fi # 3 14 ID LA 4 % LO 5 6arrow_forward
- Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 Good A Good B Good C Units Purchased 5 10 4 2010 $1.00 $2.00 $4.00 Price per Unit in 2011 $1.50 $2.50 $4.50 Refer to Table 7.4. If 2011 is the base year, the inflation rate between 2010 and 2011 is O 23.2%. O 20.4%. O 18.8%. O 14.1%. 2012 $1.50 $3.00 $5.00arrow_forwardSuppose a person receives a 9% increase in pay when inflation is 8%. In this case, the nominal increase is ______________, and the real increase is If the employee overestimates the real gain, this would be an example of O 9%, 8%, price confusion O 9%, 8%, menu costs O 1%, 8%, shoe leather costs O8%, 1%, sticky wages O9%, 1%, employee misperceptions 1arrow_forwardIf the Consumer Price Index changes from 118 in the year 2009 to 127 in the year 2011, the average rate of inflation per year over this two-year period is approximately O A. 7.6 percent. О В. 2.4 рercent. O C. 4.7 percent. O D. 8.7 percent. ОЕ. 3.7 регcent.arrow_forward
- Assuming the nominal interest rate is positive, ceteris paribus, which of the following statements is correct? O a. If the nominal interest rate is 5 percent and the inflation rate is 2 percent, then the real interest rate is-3 percent. Ob. If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. O c. When the inflation rate is zero, ceteris paribus, the nominal interest rate will be less than the real interest rate. O d. When the inflation rate is positive, ceteris paribus, the real interest rate will be less than the nominal interest rate. Next pagearrow_forwardTable 24-4 The table below pertains to an economy with only two goods - books and calculators. The fixed basket consists of 5 books and 10 calculators. Year 2006 2007 2008 Refer to Table 24-4. Using 2006 as the base year, the inflation rate is O a. 13.3 percent for 2007 and 14.8 percent for 2008. O b. 35 percent for 2007 and 14.8 percent for 2008. O c. 35 percent for 2007 and 55 percent for 2008. O d. 135 percent for 2007 and 155 percent for 2008. Price of books $24 30 32 Price of calculators $8 12 15arrow_forwardAssume that the Phillips curve equation is represented by π = +0.1 - 2ut where π = 0-1. Suppose that 0 = 1 and the inflation rate is ₁ = 3% at t = 1. What is the actual rate of inflation for t = 3 if the government maintains an unemployment rate of 3% each period? O 11% O 3% O 15% 5% O 7%arrow_forward
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