Reference no: EM13981906
1) Suppose that the value of the CPI in 2013 was 232.957 and its value in 2014 was 236.736. What was the rate of inflation in 2014 from 2013?
2) Suppose that your annual salary in 1997 was $50000 and rose to $62000 by the year 2000. If during that same time the CPI rose from 160 to 175, what was the % increase in your "real wage" over this three period?
3) Why do the CPI and the GDPD show different rates of inflation for the same time period?
4) Why has the tremendous growth in household consumption of computers since the CPI base year of 1983 imparted an upward bias to the rate of increase of the CPI?
5) If the rate of inflation in the U. S. expected by participants in Treasury bill markets rose from 2% to 4%, what would you expect to happen to the level of 1-year Treasury bill prices? Assume that investors required a 2% "real" return to willingly hold the entire existing supply of T-bills both before and after the change in inflation expectations. (If possible calculate the % Change in T-bill prices per $100 of face value... at least explain the direction of change in T-bill prices.)
6) Draw a supply demand diagram to illustrate your answer to #5.
7) The nominal yield on 10 year treasury bonds is currently ~4.9%. If an investor wishes to earn at least a 3.5% real before tax rate of return on her capital, what expectations about future inflation levels must she hold in order to willingly hold 10 year treasury bonds at existing prices?
8) Agree or disagree with the following statements and explain your reasoning:
A) The major problem with inflation is that it reduces everyone's real income.
B) If actual inflation exceeds market expectations of inflation, income is transferred from lenders to borrowers.
9) Explain why high inflation rates are likely to lower the growth rate of RGDP over time.
|
Diagram dealing with internal balance and external balance
: Using the Mundell-Fleming diagram dealing with internal balance (IB) and external balance (EB), explain what is meant by effective policy instrument choice, being careful to identify clearly the critical elements of the diagram. Why is the EB curve p..
|
|
Fiscal policy is most effective in a fixed-rate system
: Fiscal policy is most effective in a fixed-rate system when capital is perfectly mobile because there is no domestic “crowding out.” Explain what is meant by the term “crowding out,” and then critically evaluate the previous statement using the IS/LM..
|
|
Evaluate the potential of reducing fuel cost
: You work as a transportation analyst for Peregrine Trucking Co. The company's president has asked you to evaluate the potential of reducing fuel cost by using trucking equipment that is more efficient and socially conscious by proposing at least f..
|
|
Describe internal business social network tools
: Describe one of the following internal business social network tools in detail: Yammer, SharePoint, or Salesforce Chatter. This will require additional, external references to sources like articles or websites. Include these references with your c..
|
|
What was the rate of inflation in 2014 from 2013
: What was the rate of inflation in 2014 from 2013 and what was the % increase in your "real wage" over this three period?
|
|
How far is the mosquito from the bat
: If it takes 14ms for a bat to receive the ultrasonic sound wave reflected off a mosquito, how far is the mosquito from the bat? Take the speed of sound as 345 m/s.
|
|
What is the change in the momentum of the sled
: A dog team pulls a sled on ice with a horizontal force of 300 N, covering a distance of 15 m in 5 seconds. The sled moves on the ice without friction. What is the change in the momentum of the sled during this event?
|
|
Probability distribution of number of raffles tables
: The Bombay Company offers reproductions of classic 18th- and 19th-century English furniture pieces, which have become popular in recent years. The following table gives the probability distribution of the number of Raffles tables sold per day at ..
|
|
Determine the forces that support posts
: Determine the forces that support posts 1 and 2 (separated by 1.4 m) exert on the board when a 60-kg person stands on the end of the board 2.8 m from support post 2.
|