Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Give example to calculate the price level
Imagine that we have created a particular basket of services and goods. We calculate price level at four different points in time during 2008 without changing the content of the basket (the weights are unchanged). Assume that we find following time series for price level:
Point in time
Jan 1, 2008
Feb 1, 2008
March 1, 2008
April 1, 2008
Price level
60 770
62 400
62 850
Reason for choosing 607.70 is that we want index to be equal to 100 for the first point in time. Advantage of having an index which starts with 100 is that we would have a clearer picture of the evolution of prices. We may, for instance, immediately determine that prices rose by 2.68% on average in January and by 3.42% during 3 months January to March.
Note that percentage change of original price level and percentage change of the price index is the same. Percentage change won’t depend on which point in time we select as our “base” (giving price index a value of 100). Using price index, percentage change during January is (62400 – 60770)/60770 = 2, 68% that is exactly the same as percentage change of price index.
Differentiate between Actual and Potential output. Actual output is that level which economy in fact produces. In contrast, potential output is the aggregate capacity output o
i want an answer for my q Question 3 (5 marks) Most studies of firms’ long run costs have found that average costs decline as firms produce increasingly larger output levels (eco
What is the study of economics about?
conditions for steady state in solow model.in what respects is golden rule different from steady state?
When a country abandons its national currency and adopts the currency of the United States, this is known as: A) A floating exchange rate system. B) Dollarization. C) A speculat
The LM curve with inflation We know that LM curve will shift upwards when P increases (presuming MS is constant). This is still true though we can also add that LM curve glid
If rice production is land intensive and computer production is labor intensive, though both good require some land and labor, the two-good production possibilities frontier will c
New technology was just invented that decreases the cost of planting and harvesting soybeans: show the effect of this on the soybean market. Show the effect of that on the tofu mar
factor for long run trend of term of trade
The IS-curve in the AS-AD model The IS-curve is not affected by P in the AS-AD model We can define an IS-curve in the AS-AD model similarly to
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd