Question
In: Economics
John earned $59,000 of nominal income in 2017. The CPI is 242 for 2017. John earned...
John earned $59,000 of nominal income in 2017. The CPI is 242 for 2017.
John earned $60,000 of nominal income in 2018. The CPI is 252 for 2018.
(a) Calculate the percent change in John’s real income from 2017 to 2018. Please calculate your answer to the second decimal place (hundredths place). Show how you got your answer.
(b) Using the information above calculate the inflation rate from 2017 to 2018. Please show the work done to get your answer. Please calculate your answer to the second decimal place (hundredths place).
(c) If Bill lent Sue $20,000 from 2017 to 2018 and charged Sue a nominal interest rate of 5.00%, then please calculate the real interest rate that Bill earned for this loan. Please show how you got your answer. Please calculate your answer to the second decimal place (hundredths place)
(d) If Bill wanted to earn a real interest rate (return) of 5.00% for the loan mentioned above, then what nominal interest rate should he have charged Sue? Please show how you got your answer. Please calculate your answer to the second decimal place (hundredths place).
Solutions
Rahul Sunny answered 2 hours agoRelated Solutions
Year Bill's Nominal Income CPI 2010 $40,000 80 2011 $43,000 90 2012 $45,000 110 (a) Using...
Year
Bill's Nominal Income
CPI
2010
$40,000
80
2011
$43,000
90
2012
$45,000
110
(a) Using the base year as the comparison year, calculate the
Real Value of Bill’s Income for 2010 measured in base year dollars.
Please show the work done to get your answer.
(b) Using the base year as the comparison year, calculate the
Real Value of Bill’s Income for 2011 measured in base year dollars.
Please show the work done to get your answer.
(c) Using...
RATES of GROWTH (25 Marks) Year Nominal GDP (Billions) Gdp Deflator Population CPI Medium Family Income...
RATES of GROWTH
Year
Nominal GDP (Billions)
Gdp Deflator
Population
CPI
Medium Family Income
2017
2,102.57
115.006
36.514
130.658
84,950
2016
2,018.68
112.53
36.188
128.247
82,110
2015
1,985.65
112.295
35.825
126.542
80,940
2014
1,973.04
112.893
35.497
125.158
78,570
2013
1,892.19
110.944
35.102
122.8
76,550
2012
1,822.81
109.247
34.699
121.675
74,540
2011
1,769.92
107.929
34.303
119.842
72,240
2010
1,662.13
104.539
33.959
116.475
69,860
2009
1,567.37
101.619
33.581
114.45
68,410
2008
1,652.92
104.005
33.199
114.108
68,860
2007
1,573.53
100
32.848
111.45
66,550...
RATES of GROWTH (25 Marks) Year Nominal GDP (Billions) Gdp Deflator Population CPI Medium Family Income...
RATES of GROWTH
Year
Nominal GDP (Billions)
Gdp Deflator
Population
CPI
Medium Family Income
2017
2,102.57
115.006
36.514
130.658
84,950
2016
2,018.68
112.53
36.188
128.247
82,110
2015
1,985.65
112.295
35.825
126.542
80,940
2014
1,973.04
112.893
35.497
125.158
78,570
2013
1,892.19
110.944
35.102
122.8
76,550
2012
1,822.81
109.247
34.699
121.675
74,540
2011
1,769.92
107.929
34.303
119.842
72,240
2010
1,662.13
104.539
33.959
116.475
69,860
2009
1,567.37
101.619
33.581
114.45
68,410
2008
1,652.92
104.005
33.199
114.108
68,860
2007
1,573.53
100
32.848
111.45
66,550...
Coburn (beginning capital, $59,000) and Webb (beginning capital $95,000) are partners. During 2020, the partnership earned...
Coburn (beginning capital, $59,000) and Webb (beginning capital
$95,000) are partners. During 2020, the partnership earned net
income of $68,000, and Coburn made drawings of $17,000 while Webb
made drawings of $25,000.
Assume the partnership income-sharing agreement calls for income
to be divided 40% to Coburn and 60% to Webb. Prepare the journal
entry to record the allocation of net income. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
Account Titles and Explanation
Debit...
John (age 53 and single) has earned income of $3,300. He has$30,300 of unearned (capital...
John (age 53 and single) has earned income of $3,300. He has
$30,300 of unearned (capital gain) income. c. If he does not
participate in an employer-sponsored plan, what is the maximum
deductible IRA contribution John can make in 2019 if he has earned
income of $12,800?
John (age 59 and single) has earned income of $4,800. He has $31,700 of unearned (capital...
John (age 59 and single) has earned income of $4,800. He has
$31,700 of unearned (capital gain) income.
a. If he does not participate in an employer-sponsored plan,
what is the maximum deductible IRA contribution John can make
2017?
b. If he does participate in an employer-sponsored plan, what is
the maximum deductible IRA contribution John can make in 2017?
c. If he does not participate in an employer-sponsored plan,
what is the maximum deductible IRA contribution John can make...
1. During 2017, the partnership of Kiki and Tammy earned net income of $ 125,000. Kiki’s...
1. During 2017, the partnership of Kiki and Tammy earned net
income of $ 125,000. Kiki’s beginning capital was $ 60,000 and she
withdrew $15,000 during the year. Tammy’s beginning capital $
70,000 and she had drawings of $22,000 for the year.
Instructions:
(a) Assume the partnership income- sharing agreement calls for
income to be divided with a salary of $ 30,000 to Kiki and $ 25,000
to Tammy, interest of 10% on beginning capital, and the remainder
divided 60%...
Strickland Corporation earned net income of $300,000 (after taxes at a rate of 40%) in 2017....
Strickland Corporation earned net
income of $300,000 (after taxes at a rate of 40%) in 2017. It had
100,000 shares of common stock outstanding all
year, and 50,000 shares of preferred stock, non-convertible,
non-cumulative. Dividends of $20,000 were declared and paid on the
preferred.
The company also had $400,000
of 10% convertible bonds (sold at par value) convertible
into 16,000 shares of common stock.
The company had outstanding
stock options for 5,000 shares of common stock at an
exercise price...
1. The CPI is 1.00 in year one and 1.25 in year two. If the nominal...
1. The CPI is 1.00 in year one and 1.25 in year two. If the
nominal wage is $20 in year one and a contract calls for the wage
to be indexed to the CPI, what will be the nominal wage in year
two?
2. If in the economy, business saving equals $220 billion,
household saving equals $35 billion and government saving equals
–$150 billion, what is the value of private saving?
3. In country Alpha with 400 million people...
August 2017 September 2017 Total CPI +0.4 +0.5 Core CPI +0.2 +0.1 Total Vs. Core: Core...
August 2017
September 2017
Total CPI
+0.4
+0.5
Core CPI
+0.2
+0.1
Total Vs. Core: Core excludes food and energy because they’re
too volatile
1)The inflation rate in September 2017, as measured by the
percent change in total CPI, was higher/lower than it was in August
2017. Answer: Higher
2)The aggregate price level in September 2017, as measured by
the total CPI, was higher/lower than it was in August 2017. Answer:
Higher
3)The inflation rate in September 2017, as measured...
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