economics module 5

Calculate the inflation rates in 2009 and 2015. Inflation rate in 2009 was ______. Inflation rate in 2015 was ______.

-0.36; 0.12

Tom put his savings into a certificate of deposit that paid a nominal interest rate of 5 percent a year. During the year, the CPI increased from 240 to 250. What was the real interest rate that Tom earned? Round your answer up to the second decimal. Tom earned a real interest rate of _____ percent a year. Round your answer up to the second decimal.

0.83

Tom put his savings into a certificate of deposit that paid a nominal interest rate of 5 percent a year. During the year, the CPI increased from 240 to 250. What was the real interest rate that Tom earned? Round your answer up to the second decimal. Tom earned a real interest rate of _____ percent a year. Round your answer up to the second decimal.

0.83

Tom put his savings into a certificate of deposit that paid a nominal interest rate of 5 percent a year. During the year, the CPI increased from 240 to 250. What was the real interest rate that Tom earned? Round your answer up to the second decimal.Tom earned a real interest rate of _____ percent a year. Round your answer up to the second decimal.

0.83

An economics professor is discussing a measure of inflation over time based on a basket of goods comprised of all the components of GDP. Which measure is it?

GDP Deflator

Two economics professors are discussing a measure of inflation over time based on a basket of goods comprised of only the consumption expenditure component of GDP. Which measure is it?

PCE Price Index

In 2015 the GDP deflator was ________. Round up your answer to a full number. It ________ in comparison with the GDP deflator in 2014.

110; increased

The people on Coral Island buy only juice and cloth. The CPI basket contains the quantities bought in 2010. The average household spent $34 on juice and $24 on cloth in 2010 when the price of juice was $2 a bottle and the price of cloth was $8 a yard. In the current​ year, 2011, juice is $3 a bottle and cloth is $6 a yard. CPI in 2011 was ______. Round up your answer to a full number. The inflation rate in 2011 was ______ percent. Round up your answer to a full number.

119; 19

The people on Coral Island buy only juice and cloth. The CPI basket contains the quantities bought in 2010. The average household spent $34 on juice and $24 on cloth in 2010 when the price of juice was $2 a bottle and the price of cloth was $8 a yard. In the current​ year, 2011, juice is $3 a bottle and cloth is $6 a yard. CPI in 2011 was ______. Round up your answer to a full number. The inflation rate in 2011 was ______ percent. Round up your answer to a full number.

119; 19

Suppose that the base year is 2009. Real GDP in 2009 was $10 trillion (in 2009 dollars). The GDP deflator in 2013 was 112, and real GDP in 2013 was $11 trillion (in 2009 dollars). What was the percentage increase in RGDP between 2009 and 2013? By what percentage did the cost of living (as measured from GDP Deflator) rise between 2009 and 2013? NGDP in 2013 was _____trillion. Round up your answer to the second decimal. The percentage increase in production (RGDP) between 2009 and 2013 is _____ percent. The cost of living (as measured from GDP Deflator) between 2009 and 2013 rose by ______ percent.

12.32; 10; 12

Suppose that the base year is 2009. Real GDP in 2009 was $10 trillion (in 2009 dollars). The GDP deflator in 2013 was 112, and real GDP in 2013 was $11 trillion (in 2009 dollars). What was the percentage increase in RGDP between 2009 and 2013? By what percentage did the cost of living (as measured from GDP Deflator) rise between 2009 and 2013?NGDP in 2013 was _____trillion. Round up your answer to the second decimal. The percentage increase in production (RGDP) between 2009 and 2013 is _____ percent. The cost of living (as measured from GDP Deflator) between 2009 and 2013 rose by ______ percent.

12.32; 10; 12

In​ Canada, the reference base period for the CPI is 2002. By​ 2012, prices had risen by 21.6 percent since the base period. The inflation rate in Canada in 2013 was 1.1 percent. Calculate the CPI in Canada in 2013. Hint: Use the information that "prices had risen by 21.6 percent since the base period" to find the CPI in 2012. Use the inflation rate formula (inflation is the growth rate of the CPI) to find CPI in 2013, knowing the CPI in 2012 and the inflation rate. The CPI in Canada in 2013 is _____. Round up your answer to the first decimal.

122.9

In​ Canada, the reference base period for the CPI is 2002. By​ 2012, prices had risen by 21.6 percent since the base period. The inflation rate in Canada in 2013 was 1.1 percent. Calculate the CPI in Canada in 2013. Hint: Use the information that "prices had risen by 21.6 percent since the base period" to find the CPI in 2012. Use the inflation rate formula (inflation is the growth rate of the CPI) to find CPI in 2013, knowing the CPI in 2012 and the inflation rate. The CPI in Canada in 2013 is _____. Round up your answer to the first decimal.

122.9

You deposit $200 in a savings account on January 1, and the bank pays you interest of $10 at the end of the year. During the year, the average price level rises by 2 percent. The real interest rate on your savings account is ______ percent.

3

Real Wage and Nominal Wage XYZ company agreed to pay its workers $40 an hour in 1999 and $43 an hour in 2001. The CPI in 1999 was 166 and in 2001 was 180. Calculate the real wage rate in each year (to the nearest cent). Did these workers really get a pay raise between 1999 and 2001? Round up your answer to the second decimal. The real wage rate in 1999 was $ _____. The real wage rate in 1999 was $ _____.

24.10; 23.89; did not

XYZ company agreed to pay its workers $40 an hour in 1999 and $43 an hour in 2001. The CPI in 1999 was 166 and in 2001 was 180. Calculate the real wage rate in each year (to the nearest cent). Did these workers really get a pay raise between 1999 and 2001? Round up your answer to the second decimal. The real wage rate in 1999 was $ _____. The real wage rate in 1999 was $ _____.

24.10; 23.89; did not

The reference base period is a period for which the _____ is defined to equal _____. Currently, the reference base period is 1982-1984.

CPI; 100

The core inflation rate is​ ______.

the annual percentage change in the Personal Consumption Expenditure deflator excluding the prices of food and fuel