Question
In: Economics
Price ($) Quantity 2016 10 200 2017 12 400 2018 30 450 Consider the data in...
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Consider the data in the table above for a 1-good economy (the only good produced and consumed)
Given that the CPI for 2016 is 100,
- Compute the CPI inflation rates for the years 2017 and 2018.
- Determine the percentage change in GDP deflator for 2016-2017 and 2017-2018. Compare your results with your answers in (a) and justify.
- Explain three problems associated with using CPI to measure cost of living.
- The government in 2018 announced and implemented a 10 percent increase in the nominal salary of an average public servant from $500 in 2017. Does the salary of an average public servant have more purchasing power in 2017 or 2018?
- Briefly describe the concept of ‘rebasing’. Explain how rebasing affects the income and cost of living estimates of a country.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Product Quantity 2017 Price 2017 Quanity 2018 Price 2018 Meat 100 $10 120 $12 Potatoes...
Product
Quantity 2017
Price
2017
Quanity
2018
Price
2018
Meat
100
$10
120
$12
Potatoes
200
$2
180
$3
Assume the base year is given as 2017 and the market basket for
the consumer price index has two products–meat and potatoes–with
the values in 2017 and 2018 for price and quantity given by the
table above. The Consumer Price Index for 2018 equals
2)
If the price index in an certain economy rises in three
consecutive years from 100...
Economic Growth (10 Marks) 2017 2018 Product Quantity Price Quantity Price Backpacks 100 $10 120 $12...
Economic Growth
2017
2018
Product
Quantity
Price
Quantity
Price
Backpacks
100
$10
120
$12
Books
50
$15
40
$20
Using 2017 as a base year, calculate;
1) The GDP deflator
2) Nominal Economic growth
3) Real economic growth
4) Give reasons why Real GDP per capita may overstate the
well-being of a countries inhabitants?
make as per Canadian standards.
Economic Growth (10 Marks) 2017 2018 Product Quantity Price Quantity Price Backpacks 100 $10 120 $12...
Economic Growth
2017
2018
Product
Quantity
Price
Quantity
Price
Backpacks
100
$10
120
$12
Books
50
$15
40
$20
Using 2017 as a base year, calculate;
1) The GDP deflator
2) Nominal Economic growth
3) Real economic growth
4) Give reasons why Real GDP per capita may overstate the
well-being of a countries inhabitants?
Good Quantity Price 2016 Price 2017 Price 2018 A 160 $2.00 $2.40 $2.50 B 100 $3.00...
Good
Quantity
Price 2016
Price 2017
Price 2018
A
160
$2.00
$2.40
$2.50
B
100
$3.00
$3.20
$3.10
C
20
$100.00
$110.00
$120.00
Calculate the cost of living for each year.
Calculate the CPI for each year taking 2016 as the base
year.
Calculate the inflation rate for each year.
Net Exports: 2017 2017 2018 2018 Goods/Services Quantity Price Quantity Price Technology 1,000 $280,000 1,000 $300,000...
Net Exports:
2017
2017
2018
2018
Goods/Services
Quantity
Price
Quantity
Price
Technology
1,000
$280,000
1,000
$300,000
Military Arms
7,000
$20,000
5,000
$25,000
Textiles
845,000
$39.99
750,000
$49.99
Toys
900,000
$18.99
925,000
$19.99
Total
Calculate the Nominal GDP for 2017.
Calculate
the Real GDP with a base year of 2017.
What is the GDP Deflator?
What is the economy experiencing?
Table 1 Price Quantity Demanded Quantity Supplied $10 10 60 $8 20 45 $6 30 30...
Table
1
Price
Quantity Demanded
Quantity Supplied
$10
10
60
$8
20
45
$6
30
30
$4
40
15
$2
50
0
1
Refer to Table 1. The equilibrium price and
quantity, respectively, are
a.
$2 and
50.
b.
$6 and
30.
c.
$6 and
60.
d.
$12 and
30.
2. .
Refer to Table 1. If the price were $8,
a
a.
shortage of 20
units would exist and price would tend to rise.
b.
surplus of 25 units...
The price index from 2016 to 2018 is : 200, 210, 220. Derive a forecast for...
The price index from 2016 to 2018 is : 200, 210, 220. Derive a
forecast for 2019 on the basis of adaptive expectations using 0.2,
0.3 and 0.5 as weights in 2016, 2017 and 2018 respectively.
The optimal forecast for 2019 is 225 using all available
information. What is the expected price index in 2019 based on
rational expectations?
The actual value in 2019 is 223. Based on this, Paul concluded
that the expected value in (b) derived using rational...
Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded...
Compute the price elasticity of demand if price
increases from $10 to $12 and quantity demanded falls from 600 to
400. Use the value obtained and a specific example to determine
whether price must be increased or decreased to increase total
revenue. Explain why. Note: Explain only how to increase total
revenue, not decrease it.
The table below shows price and quantity data for a hypothetical economy. Quantity Demanded 2018 Prices...
The table below shows price and quantity data for a
hypothetical economy.
Quantity Demanded
2018
Prices 2017
(base year)
Prices
2018 (current
year)
10 kilograms (kg) coffee
$6/kg
$2/kg
10kg tea
$4/kg
$4/kg
Assume that a typical consumer’s food
basket contains only coffee and tea. Moreover, assume that
consumers are completely indifferent between coffee and tea. If the
official “food inflation rate” for 2018 is calculated using a
Paasche index, the substitution bias is demonstrated by the fact
that the...
Item Quantity in Basket 2017 Price 2018 Price 2019 Price Bathing suits 4 $50 $60 $75...
Item
Quantity in Basket
2017 Price
2018 Price
2019 Price
Bathing suits
4
$50
$60
$75
Snorkel gear sets
2
$150
$160
$175
Surfboards
3
$400
$450
$525
Sunscreen
8
$11
$12
$12
The table above shows the market basket for a beach lover. Use
this data to calculate the Beach Lover Price Index
(BLPI).
Suppose the base year is 2017. What is the value of the price
index in 2017? Show Work, please.
Suppose the base year is 2017....
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