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The GDP deflator in Economy land is 200 on January 1, 2010. The deflator rises to 242 by January 1, 2012, and to 266.2 by January 1, 2013.
a. What is the annual rate of inflation over the two-year period between Januarys? 1, 2010, and January 1, 2012? In other words, what constant yearly rate of Inflation would lead to the price rise observed over those two years?
b. What is the annual rate of inflation over the three-year period from January 1, 2010, to January 1, 2013?
c. In general, if P0 is the price level at the beginning of an n-year period, and Pn is the price level at the end of that period, show that the annual rate of inflation? Over that period satisfies the equation (1 + ? )^n = (Pn / P0)
The LM-curve in the AS-AD model The LM-curve will shift upwards (downward) when P is increases (decreases) in the AS-AD model is moved L
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Individual A has UA(XA,YA)=lnXA+2YA and has $500. PX=5 and PY =10. (a) Find the optimum. Show that it is indeed the maximum. (b) PX=10. Find the new optimum. (c) Calculate
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the production of 200 units of consumer goods and 300 units of capital goods : a) indicates full employment b) may be a result of unemployment c) may be impossible for now d)
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