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!
Measure Inflation : There are two common methods of measuring inflation: (i) percentage change in price index numbers(PIN), and (ii) change in GNP deflator. The two methods of measuring inflation are discussed below.Measuring inflation by PINThe following formula is used for measuring the rate of inflation through the change in the PIN.Rate of inflation = PINt = PINt-1 / PINt-1 x 100Where PIN, in the price index number in the year selected for measuring inflation in the PINt-1 is the price index number in the preceding year.The two widely used PIN s are wholesale price index (WPI), also called producer price index (PPI), and consumer price index (CPI). WPI is used measure the general rate of inflation and CPI is used to measure the change in the cost of living. In order to illustrate the measurement of inflation, let us use price index number in India in the early1990s. The WPI (1999 – 2000 = 100) for all commodities increased from 134.6 in 2005 -06 to 141.9 in 2006-07. The rate of inflation between 2005-06 and 2006-07 can be obtained by using the above formula as follows.Rate of inflation = 141.9 – 134.6 / 134.6 x 10 x 5.4 percentMeasuring inflation by GNP deflatorThe GNP deflator is the ratio of nominal GNP to the real GNP of the same year, I.e.GNP deflator = nominal GNP / real GNPWhere nominal GNP is GNP at current prices and real GNP is GNP at constant prices.The GNP deflator for any year can be obtained by using this formula. Suppose we want to calculate India’s GNP deflator for the year 2005-06. India’s nominal GNP (GNP at current prices) in 2005 – 06 was $32, 76,000 billion and her real GNP (GNP at constant prices of 1999-2000) was $ 26, 13,000 billion. Now India’s GNP deflator for 2005-06 can be obtained as follows,GNP deflator (2005-06) = 32, 76,000 / 26, 13,000 = 1, 2537In terms of percentage, GNP deflator equals 1.2537 x 100 = 125.37 percent. It means that India’s nominal GNP in 2005-06 was 125.37 percent of her real GNP, or the nominal GNP was 12.54 percent higher than her real GNP in 2005-06.The percentage change in GNP deflator between any two years gives a measure of inflation. For example the rate of inflation between 1990-91 and 1991-92 can be obtained as follows.Rate of inflation = 258.892 – 225.569 / 225.569 x 100 = 14.77%
(i) How do we measure economic growth and why do we need economic growth? (ii) What can governments do to stimulate economic growth and create jobs? (provide some current exampl
Indifference curve definition
With the recession, average incomes have fallen from $44,375 to $41,720. Before the recession Groucho's Gizmos sold 600 gizmos a month. As an economics, predict the number of gizm
discuss whether marginal utility is a realistic piece of economy analysis in a consumer demand
Institutionalist Economics: A school of heterodox economicsthat emphasizes importance of institutional development and evolution (as opposed to ‘pure' market forces) in explaining
Ask question #Minimum 100 areanycurrentsubsidyorwelfareissueddiscussedoraddressedinparliamentwords accepted#
what is the example of this law
The "Battle of Sexes" is a famous game. The story is that a couple tries to decide what to do on a Friday evening. The girl prefers to go to an Opera and the guy prefers to go to t
In markets, the invisible hand allocates resources efficiently a. in all cases b. when there are positive externalities, but not when there are negative externalities c. when there
The Market Mechanism Features of the equilibrium or market clearing price: – QD = QS – No shortage or scarcity – No extra supply price. – No pressure on th
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