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- Question a.Calculate GDP Deflator for all three years. b.Calculate Inflation rate in year 2 and year 3. c.Now calculate Inflation rate in year 3 compared to year 2.1. The following prices and quantities produced were recorded in computer land during the years shown and Calculate the following and show your work. a) Using the GDP deflator what was the average annual rate of inflation during 1993 and 1994?The nominal GDP for 2021 is $125 billion, and the real GDP for 2021 is $100 billion. (1). Calculate the GDP Deflator in 2021? Show your calculation. (2). Also assume that the GDP deflator in 2020 was 100. What is the inflation rate over the 1-year period? Show yourcalculation.
- A country produces only sugar and wheat in the quantities and prices listed below. The GDP deflator is given by Nominal GDP/Real GDP *100. If 2018 is the base year, i. What is the GDP deflator for years 2019 and 2020? Show your workings ii. What is the inflation rate year 2019-2020? Show your workings Year Price of sugar Quantity of sugar Price of wheat Quantity of wheat 2018 $2.00 200 $10 40 2019 $2.30 250 $14 50 2020 $2.75 280 $18 80Question 2 Complete the following table for a given country and show how can you determine if the country faces an inflation in 2018? Nominal GDP2017 Nominal GDP2018 Real GDP2018 P P P 4 2 3 4 3 3 4 3 6 2 GDPUse the following data for 2019 to answer the question: Prices That Rose Health insurance Gasoline Lettuce (%) Prices That Fell +20.5 Televisions +12.8 Peanut butter +7.6 Oranges +5.9 Apples +4.2 Eggs +1.9 College textbooks +0.6 Coffee Average Inflation Rate: +2.3% Cigarettes Hot dogs College tuition Bananas (%) -20.8 -6.0 -5.5 -4.8 -4.6 -3.1 -1.4
- Calculate the growth rate in real GDP for 2012. (using 1 decimal place Calculate the growth rate in real GDP for 2013. (using 1 decimal place Calculate the cost of the market basket for 2011 (using 1 decimal place). Calculate the cost of the market basket for 2012 (using 1 decimal place). Calculate the cost of the market basket for 2013 (using 1 decimal place). Calculate the CPI for 2012 (using 1 decimal place). Calculate the CPI for 2013 (using 1 decimall place). Calculate the inflation rate for 2012 using the CPI (using 1 decimal place). Calculate the inflation rate for 2013 using the CPI (using 1 decimal place). Calculate the GDP defilator for 2012. Calculate the GDP defilator for 2013 (using 1 decimal place). Calculate the inflation rate for 2012 using the GDP deflator (using 1 decimal place). Calculate the inflation rate for 2013 using the GDP deflator (using 1 decimal place). 96 96 196 196You are provided the following data regarding an imaginary country. 2019 2020 Commodities Price Quantity Price Quantity A 3 30 25 4 20 5 30 C 20 18 25 25 a) Using the data given above, compute the Nominal and Real GDP for 2019, and 2020. (The base year is 2019) b) Compute the inflation rate for the year 2020 by using the GDP deflator.Inflation doesn’t in itself reduce people’s real purchasing power” : Discuss
- a) Explain how real interest rate affects net exports b) A friend from the U.S. visited Ghana and exclaimed that cost of living for visitors to Ghana is much cheaper now than it was 2 years ago. According to your friend, 2 years ago, a dollar was equivalent to 5 cedis. Today, a dollar buys 7.5 cedis. Is your friend right or wrong, if inflation over the 2-year period is 25 percent in the U.S. and 100 percent in Ghana?Consider the data for a known country for the consumer price index (CPI), by components:(base year 2015 = 100) a) Interpret the value of the CPI index in December 2018. b) Calculate the year-on-year inflation rate corresponding to the CPI, in December 2018. c) Suppose the GDP Deflator in 2020 is predicted to be 1.09. What can be interpreted?Calculate the GDP deflator and the rate of inflation for each year: (€ million) Nominal GDP Real GDP 2013 3,540,000 2,900,000 2014 4,730,000 3,250.000 2015 5,110,000 4,800,200
