Question

In: Economics

1. What are the two most common measures of inflation? How are they measured? 2. Use...

1. What are the two most common measures of inflation? How are they measured? 2. Use the loanable funds model to analyze: i).The effects of a government budget deficit on the equilibrium interest ate and quantity of loanable fund 2. An investment tax credit increase on the equilibrium interest ate and quantity of loanable fund

Solutions

Expert Solution

The two most common measures are cpi and producer price index. Cpi is measured by measuring price changes in the basket of goods purchased by a typical consumer. Producer price indexes are measured by measuring change in selling prices of domestic producers.

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