ECON-1010 Lecture Notes - Lecture 7: Gdp Deflator, Market Basket, Opportunity Cost
Get access
Related Documents
Related Questions
The table below lists annual consumer price index and inflation rates for a country over the period 2005-2010. Assume the year 2005 is used as the base year.
Year | Consumer Price Index | Inflation Rate |
2005 | 100 | |
2006 | 115 | B |
2007 | 125 | C |
2008 | 140 | D |
2009 | A | 10% |
2010 | 160 | E |
| |||
120 | |||
| |||
|
The price index was 170 in the first year, 180 in the second year, and 195 in the third year. The inflation rate was about
| |||
| |||
| |||
|
0.1 points
QUESTION 17
The price index was 150 in the first year, 142.5 in the second year, and 138.2 in the third year. The economy experienced
5.0 percent deflation between the first and second years, and 3.0 percent deflation between the second and third years. | ||
7.5 percent deflation between the first and second years, and 4.3 percent deflation between the second and third years. | ||
5.3 percent inflation between the first and second years, and 4.1 percent inflation between the second and third years. | ||
7.5 percent inflation between the first and second years, and 4.3 percent inflation between the second and third years |
0.1 points
QUESTION 18
Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?
| |||
| |||
| |||
|
0.1 points
QUESTION 19
If the nominal interest rate is 6 percent and the rate of inflation is 2 percent, then the real interest rate is
| |||
| |||
| |||
|
0.1 points
QUESTION 20
If the nominal interest rate is 7 percent and the real interest rate is -2.5 percent, then the inflation rate is
9.5 percent. | |||
| |||
| |||
|
. From 2009 to 2010, the CPI for education increased from 279.3 to 281.8. What was the inflation rate for education between 2009 and 2010?
0.9% | |||
| |||
| |||
|
If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?
| |||
| |||
| |||
9.1% |
. Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2013, the basket’s cost was $80; in 2014, the basket’s cost was $86; and in 2015, the basket’s cost was $90. The value of the CPI in 2015 was
104.6 and the inflation rate was 4.6%. | |||
| |||
| |||
|
Suppose a basket of goods and services has been selected to calculate the CPI. In 2002, the basket’s cost was $80; in 2008, the basket’s cost was $92; and in 2010, the basket’s cost was $108. The base year must be
| |||
2002 | |||
2008 | |||
|
Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basket’s cost was $80.00; in 2013, the basket’s cost was $84; and in 2014, the basket’s cost was $87.60. The value of the CPI was
| ||||
| ||||
| ||||
|
Which of the following is correct?
| |||
| |||
| |||
|
The inflation rate is defined as the
| |||
| |||
| |||
|
Economists use the term inflation to describe a situation in which
| |||
| |||
| |||
|
There are probably a thousand macroeconomic indicators, some measure the overall national economy, but some are more limited in scope. The three most often quoted and publicized are the Gross Domestic Production Index (GDP), the Consumer Price Inflation Index (CPI), and the Unemployment Index. Please complete the short answer questions regarding these three indicators:
A. Use the table below:
Table 6-1
 |
Value (in billions) |
Personal consumption expenditures |
$1,000 |
Gross private domestic investment |
$500 |
Net exports |
$300 |
Imports |
$180 |
Government purchases of goods and services |
$280 |
Transfer Payments |
$90 |
a. What is the value of GDP?
b. In each of the following cases indicate if GDP is affected,+ under what category, and what happens to GDP. Be sure to explain why or why it is not included.
- You buy a used textbook from one of your classmates.
- You buy a new umbrella.
- Ella, a French tourist, has a haircut in a salon in San Francisco.
- Oklahoma cleans up after a devastating tornado.
- A pension payment to a retired military person.
B. Why do some people gain and other people lose from inflation and deflation?
C. Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.
D. What is structural unemployment? State the various reasons due to which it can arise in an economy.