Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 6, Problem 9P
To determine
(a)
To determine
(b)
CPI in base year and annual rate of consumer price inflation in 2017.
To determine
(c)
CPI in base year and annual rate of consumer price inflation in 2017.
To determine
(d)
CPI in base year and the annual rate of consumer price inflation in 2017.
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13. Refer to Table 24-3. Calculate the inflation rate for March.
14. Explain how the prices of goods and services used in the CPI differ from the prices reflected by GDP deflator.
6)
a. The Consumer Price Index (CPI) is determined by
estimating the prices of goods and services in the economy at the same rate as the cost of living increases.
comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in cities around the country.
averaging all the prices of goods and services in the economy.
comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in a base year.
b. The Bureau of Labor Statistics (BLS) would calculate the rate of inflation for year 5 by
adding the CPI of year 4 to the CPI of year 5, and then dividing by 2.
adding the CPI of year 4 to the CPI of year 5, and then dividing by the average of year 4 and year 5.
subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year 5.
subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year…
6. The following table shows the CPI for each year from 2009 to 2021
Year CPI
2009 172
2010 177
2011 189
2012 200
2013 212
2014 220
2015 220
2016 230
2017 250
2018 255
2019 270
2020 280
2021 300
(a) In 2010, I deposited $380 in by interest bearing saving account. In 2021, in my account I had $412 expressed in 2013 prices. What is the average annual nominal interest rate I earned on my deposit from 2010-2021?
(b) In another account, I deposited $1200 in an interest bearing saving account in 2008. I held the money in the account from 2008-2014. The annual real interest rate I earned on the account was r = 0. How much did I have in my account in 2014 (the nominal value)
Chapter 6 Solutions
Econ Macro (book Only)
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Similar questions
- Question 3 a: Does an increase in the price of imported Belgian chocolate affect the CPI or the GDP deflator more? Why (Word count: 100 words max.) b: Cost of a dozen oranges was Rs80 in January 1980 and Rs.170 in January 2018. The average hourly wage for production and nonsupervisory workers was Rs.650 in January 1980 and Rs.2200 in January 2018. i) By what percentage did the price of oranges rise? ii) By what percentage did the wage rise? iii) In each year, how many minutes did a worker have to work to earn enough to buy a dozen oranges? v) Did workers’ purchasing power in terms of oranges rise or fall?arrow_forward4. Calculate the growth rate of real GDP in 1998. 5. Calculate the growth rate of nominal GDP in 1998. 6. Calculate the CPI for 1997. 7. Calculate the inflation rate for both 1997 and 1998.arrow_forward16. Suppose the Tooth Fairy paid 50 cents for a tooth in 1970. The CPI in 1970 was 38.8, while the CPI in 2010 was 218.1. What is the value of the Tooth Fairy’s payment in 2010 dollars?arrow_forward
- 4. What is the Consumer Price Index of the Philippines?arrow_forwardProduct Quantity Base Year Price (2011) Price (2021) Price (2022) Burritos 10 $1.00 $1.50 $1.75 Flashlights 15 5.00 7.00 6.75 Golf Balls 8 2.00 3.00 3.50 Consider a simple economy that produces only three products: burritos, flashlights, and golf balls. Use the information in the table to calculate the total expenditure for 2021 and 2022; the CPI for 2021 and 2022, and the rate of inflation for 2022, as measured by the CPI. Please include all work.arrow_forward22. What is the rate of Inflation in 2016 if the consumer Price Index (CPI) at the end of 2015 was 175 and CPI at the end of 2016 was 184? a.9.2% b.5.14% c.6.5% d.4.5%arrow_forward
- -example of CPI in todays economy (2022) -exmaple of GPD in todays economy (2022)arrow_forward1)Calculate the consumer price index in the year 2020 & 2021 . 2)Calculate the rate of inflation in year 2021?arrow_forwardTyped and correct answer please. Consider the data shown below for the Canadian Consumer Price Index (CPI), drawn from the Bank of Canada's website. a. Compute the missing data in the table. (Round your responses to one decimal place.)arrow_forward
- Q1: The consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. Calculate the price index of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2018, 2019, and 2020. Calculate the percentage change in index between 2018 and 2019 and again between 2019 and 2020. What is rate of inflation/deflation between 2019 and 2020? GOOD QUANTITY CONSUMED 2018 PRICES 2019 PRICES 2020 PRICES X 100 Rs. 10.00 Rs.10.50 Rs. 10.75 Y 150 Rs. 10.50 Rs. 20.00 Rs. 20.00 Z 25 Rs. 30.00 Rs. 30.25 Rs. 30.00arrow_forwardQuestion 2a) What is the Consumer Price Index (CPI)?b) Consider an economy that produces and consumes shoes and houses. In thetable below are data for two different users.Year2000Year2001 Price of a house $120,000 $145,000Price of a pair of shoes $150 $170Number of houses produced 1,000 1,050Number of pairs of shoes 650,000 525,000(i) Calculate the CPI for both years.(ii) Calculate the rate of inflation for 2001 using the CPI.(iii) Calculate the GDP deflator for both years.(iv) Calculate the rate of inflation for 2001 using the GDP deflator.arrow_forwardMacroeconomics 1) a. If the nominal interest rate is 0.05% and the inflation rate is 1%, what is the real interest rate? b. The US nominal GDP in 2000 was $10,472.3 billions of dollars and $18,869.4 billions of dollars in 2016. The CPI was 172.2 in 2000 and 240 in 2016. What was the percentage change (i.e. the growth rate) in real GDP between 2000 and 2016? c. Suppose that your annual (nominal) salary in 2015 was $20,000. Suppose that the CPI had a value of 80 in 2015 and of 84 in 2016. Suppose also that the real increase in your salary between 2015 and 2016 was 2%. What was your annual (nominal) salary in 2016? 2) a) In 2016 the US labor force was 159,186 thousands of persons and there were 7,750 thousands of unemployed. What was the number of employed persons? What was the unemployment rate? Was this unemployment rate abnormal by historical standards? b) Briefly explain the relationship between unemployment and the position of the long-run aggregate supply curve in the AD/AS graph.…arrow_forward
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