QUESTION 1 Jessica, a Canadian citizen, works only in France. The value she adds
ID: 1162213 • Letter: Q
Question
QUESTION 1
Jessica, a Canadian citizen, works only in France. The value she adds to production in France is included
a.
in both French GDP and Canadian GDP.
b.
in French GDP, but is not included in Canadian GDP.
c.
in Canadian GDP, but is not included in French GDP.
d.
in neither French GDP nor Canadian GDP.
QUESTION 2
The price index was 240 in one year and 283 in the next year. What was the inflation rate?
a.
15.19 percent
b.
108.3 percent
c.
17.92 percent
d.
38.2 percent
a.
in both French GDP and Canadian GDP.
b.
in French GDP, but is not included in Canadian GDP.
c.
in Canadian GDP, but is not included in French GDP.
d.
in neither French GDP nor Canadian GDP.
4. The table below pertains to Goldbell, an economy in which the typical consumer's basket consists of 2 jackets and 15 hamburgers Year Price of Jackets 2009 $40 2010 $45 2011 $50 Price of Hamburger $3 $4 $3 From the table give calculate the CPI for 2009, 2010 and 2011. Also calculate the inflation rate for 2010 and 2011. (Make sure to show all steps).Explanation / Answer
QUESTION 1
Jessica, a Canadian citizen, works only in France. The value she adds to production in France is included
Answer: (b).
in French GDP, but is not included in Canadian GDP.
Explanation: According to definition of GDP, "GDP is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year." Geographic Boundary is France so it will be considered in France's GDP.
QUESTION 2
The price index was 240 in one year and 283 in the next year. What was the inflation rate?
Answer: (C) 17.92 percent
Explanation : Inflation rate = [(283 - 240 )/240 ] * 100 = [43/240 ] * 100 = 17.92%
Question 4: Basket = 2 Jackets and 15 hamburgers
Since Base year is not given, therefore taking 2009 as base year
CPI2009 = ( Price of basket in 2009 / Price of basket in 2009 )* 100 = 100
CPI2010 = ( Price of basket in 2010 / Price of basket in 2009 )* 100 = [{( 45*2) + (15*4)}/{( 40*2) + (15*3)} ]*100 =[150/125]*100 = 120
CPI2011 = ( Price of basket in 2011/ Price of basket in 2009 )* 100 = [{(50*2) + (15*3)}/{( 40*2) + (15*3)} ]*100 =[145/125]*100= 116
Inflation Rate2010 =[(CPI2010 - CPI2009)/CPI2009]*100 = 0.2 * 100 = 20%
Inflation Rate2011 =[(CPI2011 - CPI2010)/CPI2010]*100 =-0.2 * 100 = - 20%
Answer: (b).
in French GDP, but is not included in Canadian GDP.
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