Unusually high period, Macroeconomics

Assignment Help:

The consumer price index for the 1978-82 periods and the GDP deflator follow. This was a period of unusually high, but declining, inflation. (The CPI is equal to 100 in the base years, 1982 - 84; the GDP deflator is equal to 100 in the base year 1987) CPI GDP Deflator 1978 65.2 60.3 1979 72.6 65.5 1980 82.4 71.7 1981 90.9 78.9 1982 96.5 83.8 A : Calculate the rate of inflation according to both measures from 1979 through 1982 .What might explain the differences between the two B: Suppose that the hourly wage rate for a group of workers that sign an employment contract for the three year period starting in 1979 is indexed to the CPI according to the formula ?W/W= 0.03 +0.05 ?CPI/CPI Calculate the actual increase in wages during each year of the contract period. If the wage is $12.00 in 1979, what was it in 1980, 1981, and 1982? What happens to the real wage measured in terms of the CPI Repeat your calculations with 0.03 reduced to 0 and 0.5 increased to 1 .What indexing formula would the workers employer have preferred? Is there any reason for the employer to have been happy with the other formula before the actual inflation experience was known?


Related Discussions:- Unusually high period

Find real interest rate and nominal interest rate, Assume that an economy's...

Assume that an economy's GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function is represe

What is inflation, Q. What is Inflation? Inflation between two points i...

Q. What is Inflation? Inflation between two points in time is defined as percentage increase of price index between these two points in time.  Comments: Price inde

What is the price elasticity of supply, What is the price elasticity of sup...

What is the price elasticity of supply? Price elasticity of supply: The price elasticity of supply is a measure of the receptiveness of the quantity of a good supplied to pr

Benefits and disadvantages of each scenario, Do you think that public admin...

Do you think that public administrators should be restricted to only laid down rules in the discharge of their duties as espoused by Max Weber or should they have some amount of di

Robert''s new way vacuum cleane, Robert's New Way Vacuum Cleaner Company is...

Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t

Explain growth theory, Q. Explain Growth theory? The purpose of this to...

Q. Explain Growth theory? The purpose of this topic is to try to explain growth in GDP. The models in this topic are very different from the rest of the models as they use only

Static and dynamic multipliertitle.., suppose c=a+by and investmentI is giv...

suppose c=a+by and investmentI is given.assuming mpc=.80 and I=50,find static and dynamic moel question #Minimum 100 words accepted#

Long run imports will most likely be paid, In the long run, imports will mo...

In the long run, imports will most likely be paid for with: a. Aexports. b. The sale of real and financial assets. c. the extension of credit. d. higher domestic unempl

Explain the gains from trade of market, Explain the Gains from Trade of mar...

Explain the Gains from Trade of market. Producer Surplus, Consumer Surplus, Gains through Trade and Efficiency of Markets: Consumers and producers both are better off since

Analyse and contrast the macroeconomic behaviour, Collecteconomic data for ...

Collecteconomic data for three countries: Australia, China and Greece.The data is toobtainedfrom official sources as time series forthe key macroeconomic variables. These arereal G

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd