Answer all if you can, the most and correct answers will get the points. Thanks!
ID: 1100498 • Letter: A
Question
Answer all if you can, the most and correct answers will get the points. Thanks!
1. The table shows an economy's total production and the prices of the final goods it produced in 2009 and 2010. The base year is 2009. Calculate the percentage change in production in 2010.
2. Pete is a student who spends 10 percent of his expenditure on books and supplies, 30 percent on tuition, 30 percent on rent, 10 percent on food and drink, 10 percent on transportation, and the rest on clothing.
The price index for each item was 100 in 2000.
The table shows the price indexes in 2011.
3. Last month, the interest rate on a money fund averaged 0.08% a year and on 5-year CDs it was 2.6% a year. The inflation rate was 0.1% a year.
The real interest rate on a money fund is what percent a year (you can answer to 2 decimal places).
4. Made in 1982, E.T. earned $435 million at the box office.
Made in 1997, Titannic earned $601 million.
The CPI in 1982 is 96.5, and the CPI in 1997 is 160.5
Which movie had the greater real box office revenues?
Coverting to 1997 dollars, the $435 million E.T.earned in 1982 was the equivalent of $(answer here) million in 1997 so (E.T. or Titanic - choose one) had the larger real box office revenues.
Explanation / Answer
1.
In 2009
$240
Total Value = $360
In 2011
$750
Total Value = $1070
% change in production = 1070/360 = 297%
2.
3. Real rate of interest = Nominal rate - Inflation rate
Real rate of interest rate is -0.02%
4. E.T. earnings in 1997's $ terms = E.T. earning in 1985 * CPI(1997) / CPI(1982)
E.T. earnings in 1997's $ terms = $435 million * 160.5 / 96.5 = $723.5 million.
So ET had larger real earnings
Item Quantity Price Total Value Fish 120 $1 $120 Berries 40 $6$240
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