Year 1 Price $150 $4 $10 Year 2 Year 3 Quantity Price Quantity Price 120 950 250
ID: 1134975 • Letter: Y
Question
Year 1 Price $150 $4 $10 Year 2 Year 3 Quantity Price Quantity Price 120 950 250 Quantity 120 1,200 300 Violins Apples Books 100 1,000 200 $200 $4.50 $12 $220 $3.75 $13 G. (3 points) Continue to assume Year 2 is the base year. Calculate the CPl in each of the three years. Round to the nearest 100th. Year 1: Year 2: Year 3: H. (3 points) Using the CPI, calculate inflation for Years 1 to 2 and Years 2 to 3. Also, calculate inflation for Years 1 to 3. Years 1 to 2: Years 2 to 3: Years 1 to 3: I. (2 points) In theory, why might the GDP deflator give a different level of inflation than the CPI?Explanation / Answer
I.
Answer:- Year1 Year2 Year3 G. CPI 76 100 109 H. Inflation(%) Year 1 to 2 32 Year 2 to 3 9 Year 1 to 3 44I.
GDP deflator give a different level of Inflation than CPI because GDP deflator includes both consumers and capital goods.Related Questions
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