What is inflation and how does it affect consumers

Reference no: EM132473086 , Length: word count :- 300

Year Current price Base yr price Price index

2006 1 1 100 Price index = (Current price/Base yr price)*100

2007 1.25 1 125

2008 1.34 1 134

2009 1.46 1 146

Question 1: Consider the price index above. What are the values for A, B, and C? Was there inflation from 2006 to 2009? If the price changes above occurred for all goods across the economy during the four year period, explain how nominal GDP and real GDP would differ.

Question 2: What is inflation, and how does it affect consumers? Is inflation always bad? Describe a situation where inflation is positive? 200 TO 300 WORDS

Reference no: EM132473086

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