Good Q. Beer Q. Snacks P. Beer P. Snacks 2017 50 100 $1.25 $1.10 2018 150 $2.00

Question

Good Q. Beer Q. Snacks P. Beer P. Snacks 2017 50 100 $1.25 $1.10 2018 150 $2.00 $1.20 4) What is the nominal total expenditures for 2017 and 2018 respectively?4) A) S172.5, $270 B) 172.5, S220.0 C) S374.5, S756.3 D) none of the above. 5) Using the Laspeyres price index, what are total expenditures for 2018? 5) A) S172.5 C) none of the above. D S270.0 B) S220.0 6) Using the Paasche price index, what are total expenditures for 2018? A) $172.5 C) S270.0 6) B) none of the above D) S220.0 7) Using the Paasche price index, what are total expenditures for 2018? A) none of the above. B) $172.5 C) $270.0 7) D) S220.0 8) What is the inflation rate using the Paasche price index between 2017 and 2018? A) 27.5% C) 24.8% 8) B) 22.0% D) none of the above. 9) What is the inflation rate using the Fisher's mean between 2017 and 2018? A) 22.0% C) 24.8% 9) B) 27.5% D) none of the above.

Explanation / Answer

4.
Option A
2017:=50*1.25+100*1.1=172.5
2018:=45*2+150*1.2=270

5.
Option B
Laspeyre 2018:=(2*50+1.2*100)=220

6/7.
Option C
Passche 2018:=(45*2+150*1.2)=270

8.
Inflation=270/(1.25*45+1.1*150)-1=270/221.25-1
=22%

P.S.: I am allowed to answer only 4 questions

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