Overestimated or underestimated the inflation rate

Assignment Help Business Economics
Reference no: EM133126012

In this exercise you are asked to compute the inflation rate according to the Consumer Price Index. Imagine that a country produce four goods: Apples, Oranges, Rice, and Space Satellites. A basket of goods of the typical average family is 10 kg. apples, 20 kg. of oranges, and 50 kg. of rice. The economy is closed. Below you can find the quantity and prices of goods produce in this economy the year 2010, 2011, 2012 for this economy. The number in parenthesis refer to (price, quantity).

Assume that 2010 is the base year. Compute.

1. The Consumer Price Index for the year 2010, 2011, 2012

2. The inflation rate between 2010 and 2011 and between 2011 and 2012. Using the above information the two inflation rates are 18.75% and 15.78%

3. Do you think the inflation rate has overestimated or underestimated the inflation rate in any of the years? Explain

Reference no: EM133126012

Questions Cloud

Do fda and others have reason to call this md a fraud : Can the following questions 1-5 be answered correctly using the link provided below as an example for me to use because I previously got a 53 and can the answer
Price control policy in the market of electric cars : With the concerns over the environment, the UK government sets a plan that new cars and vans powered wholly by petrol and diesel will not be sold in the UK from
How would you manage financial risk : How would you manage financial risk with the help of Asset Class, Industry Sector, Geographic Region and Portfolio Management style. Explain
How much should you charge during the week : Suppose the marginal cost for a round of golf is $20. How much should you charge during the week, and how much during the weeked?
Overestimated or underestimated the inflation rate : In this exercise you are asked to compute the inflation rate according to the Consumer Price Index. Imagine that a country produce four goods: Apples, Oranges,
What is the relationship between the topic objectives : What is the relationship between the topic objectives, the assignment, and the rubric? How is each component important to completing an assignment
Consumer surplus components : Considering only the DWL from adverse selection and the consumer surplus components mentioned above, is the mandate welfare improving on average?
How much money must you invest today : If you need P350,000 for a down payment on a house in 3 years, how much money must you invest today at 8% interest, compounded quarterly
Find market equilibrium price and quantity : Assume the following table shows the demand and supply for bottles of whisky in the UK.

Reviews

Write a Review

Business Economics Questions & Answers

  Account for the risk embodied in the new project

What if you used a rate properly accounted for risk, obtained by using the CAPM?

  Elucidate how has the number of payroll jobs changed

Elucidate how has the number of payroll jobs changed over the last 3 months and over last year in Antigua and Barbuda.

  What are the equilibrium for this model

Suppose a fish population experiences logistic growth with growth rate r per year and environmental carrying capacity C. The population is harvested at a rate of h per year. What are the equilibrium for this model? Are they stable or unstable? What i..

  Describes the concept of laissez-faire

Which of the following best describes the concept of laissez-faire?

  How much l should you hire

Your production function is Q = aK + bL. L costs twice as much as K per unit. If a = 2 and b = 1, how much L should you hire?

  Monopoly-oligopoly and monopolistic competition

It is known the pricing policies, profit maximization decisions, and short run and long run behavior of perfectly competitive firms, monopoly, oligopoly and monopolistic competition. Discuss what is unique or important about each of the markets liste..

  Construct the extensive form

Construct the extensive form (tree diagram) to analyze this game. Label appropriately

  Traci consumes two goods-lemonade and pretzels

Traci consumes two goods, lemonade and pretzels. Lemonade costs $2 per glass, and she consumes it to the point where the marginal utility she receives from her last glass of lemonade is 4. Pretzels cost $3 per bag. The relationship between the margin..

  Stands for maintenance and operation cost

The following table summarizes information which are associated with three new 3D Printers being considered for use in a manufacturing plant. Note that M&O stands for Maintenance & Operation Cost.

  What is the conversion ratio

The bond pays $60 per year in interest and is selling in the market for $965. It matures in 7 years. Market rates are 10% annually.

  The price of an acupuncture session increases

How would each of the following changes affect the demand curve for acupuncture? a. The price of an acupuncture session increases. b. A reduction in back problems occurs as a result of sessions on stretching on a popular television show.

  Basic three sector model and instead of assuming

If we modify our basic three sector model and instead of assuming that taxes are autonomous or fixed in amount (the Tx = Txo assumption) now assume that taxes are a positive function of income, will this modification have the effect of increasing, de..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd