The consumer price index (CPI), with a base of 1982-84, increased from 219.40 in 2010 to 257.00 in 2019. Thecorresponding increase in the producer price index (PPI) was from 177.80 in 2010 to 189.20 in 2019.a. Use the appropriate price index to compute John's percentage change in real income if his (nominal) income increasedfrom $53,000 in 2010 to $69,000 in 2019. (Round your answer to 2 decimal places.)b. Use the appropriate index to compute the percentage change in real revenue of John's company if the nominalincrease was from $14.2 million in 2010 to $15.8 million in 2019. (Round your answer to 2 decimal places.)

a. To compute John's percentage change in real income, we need to use the Consumer Price Index (CPI)…

Answered: The consumer price index (CPI), with a…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 18P

See similar textbooks

Similar questions

Suppose Jack has $400 in nominal income. The price per unit of DVDs is $20. Accordingly, what is Jack's real income in terms of DVDs? O a. O b. O c. Od. between 0 and 15 between 15 and 30 between 30 and 45 between 45 and 60 e. greater than 60
Using the table below, find the real value of a payment of $2,500 to be recelved each year given the following CPI values. Next find the amount that this $2,500 should be adjusted to in order to keep its real value at $2,500. Instructions: Round your answers to two decimal places. Cost-of-living adjusted payment BUL 2,500 I Real value of Year CPI $2,500 2015 T 100 2016 103 | 2017 105 2018 110
The expenditures of a typical family on gas, food,and clothing in 2009 and 2010 are given in the table below. Assume quantses are constant trom 2009 to 2010. Expenditures in 2009 (in S) S60 310 80 Category Expenditures in 2010 (in S) Gas 568 Food 341 24 Clothing When the base year is 2009 the value of Consumer Price index (CPI) for year 2010 is (Round your response to wo decimal places) Incorrect: 1 Check answer Clear all
You borrow $50,000 today at a rate of 5%. Today, inflation instantly rises to 7% and stays that way for the duration of your loan. Based on the above information today O you will pay the lender back exactly $55,500. O you will pay the lender back exactly $60,700. the real rate of interest on your loan is 10% the real rate of interest on your loan is -2% O the real rate of interest on your loan is 2%
Exercise 3 1) The table below gives the price and consumption (usage/sales) for two products x and y for four years. Using year 2000 as the base year calculate for each year, the b) Laspeyers price index, and Quantity x, q, a) Basic expenditure index Year c) Paasche price index Quantity y, q, Price of Price of y, Py х, р, 2000 R4 R3 3 2001 R5 6. R4 6. R5 R7 2002 R6 4 4 2003 R6 4 4 2) Below is a table of items consumed in a hotel for three years together with the average price of each item for each of the three years. Using 2003 as the base year, calculate for each subsequent year, the a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index d) Laspeyers volume index e) Paasche volume index Item 2003 2004 2005 Quantity | Price (R) 3.95 Quantity Price (R) Quantity Price (R) Milk 2920 3100 4.10 3210 4.10 Bread 2190 3.60 2230 3.80 2200 4.00 Eggs (each) 0.60 7.20 14.00 16425 17563 0.60 17890 0.65 Butter 730 680 7.70 650 8.30 Cheese 1135 1086 14.9 1150 16.00 Margerine…
Using the table below, find the real value of a payment of $2.200 to be received each year given the following CPI values: Next find the amount that this $2,200 should be adjusted to in order to keep its real value at $2,200. Instructions: Round your answers to two decimal places. Real value of Cost-of-living adjusted payment 2,200 66 O Year CPI $2,200 2015 100 2,200 2016 103 2135.92 O 2017 105 2095.24 O 110 110 2000 220 2018
Lori is a student who teaches golf on the weekend and in a year earns $40,000 after paying her taxes.At the beginning of 2020, Lori owned $3,000 worth of books and golf clubs and she had $7,000 in a savings account at the bank.During 20020, the interest on her savings account was $280 and she spent a total of $30,000 on consumption goods and services. The market value of her books and golf clubs did not change.How much did Lori save in 2020? What is her wealth at the end of 2020?In 2020, Lori saved $____
. Jim's nominal income in 2010 was $72,500. How much was his real income if 2010 Was the base year?
Why is the PCE deflator a preferred measure of consumer prices over the CPI? O the PCE data is released monthly while the CPI data are quarterly the PCE also is subject to substitution bias, but it does not include new goods O It is not a fixed basket, so it does not have the substitution bias present in the CPI O It is a fixed basket of goods whereas the CPI is not a fixed basket
O The salary of a consumer increased from ¢90, 000 to ¢110, 000, which represents his salary for 2021 and 2022 respectively. If he spends all his salary on baskets of apples which costed ¢100 in 2021 and increased to ¢109 in 2022, find the change in real income of the consumer.
Taylor's nominal income is $50,000 per year in Acity where the cost-of-living index is 200. Taylor is considering accepting a similar job and relocating to Becity where the cost-of- living index is 210. For Taylor's income to have the same purchasing power in Becity as $50,000 has in Acity, then Taylor's nominal income per year in Becity must equal: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $50,000. b $52,100. C $52,500. d. $55,000.
When a firm produces and sells a refrigerator worth $1,000, its contribution to the gross domestic product (GDP) on the income side is measured by: O a. the price paid by the consumer. b. the investment made by the firm to manufacture the refrigerator. c. the cost of raw materials used by the firm to manufacture the refrigerator. d. the sum of the wages, interest, and rent paid by the firm's owners and the profit of the firm. e. the stock of inventories used by the firm to manufacture the refrigerator.

SEE MORE QUESTIONS

Recommended textbooks for you

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

MACROECONOMICS FOR TODAY

Economics

ISBN:

9781337613057

Author:

Tucker

Publisher:

CENGAGE L

SEE MORE TEXTBOOKS