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Pronicm L2pointshi The prices of good the end Ocac Te etucem 2015 and 2018 (with 2015 being the base year) listed in the table which also shows the annual rate of i...

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Pronicm L2pointshi The prices of good the end Ocac Te etucem 2015 and 2018 (with 2015 being the base year) listed in the table which also shows the annual rate of inflation: Ycar 2015 2016 2017 2018 Price 250 270 290 3u0 Inflation 6% #here 1 the Iast three digits of your student code (for example: if a student code is 17071435 then 4J= a/ Mf the index number of the real price for 2019 is [05 and the rate of inflation for this ear S"/_ work out the nominal value of the price in 2019: 6/ If t

pronicm L2pointshi The prices of good the end Ocac Te etucem 2015 and 2018 (with 2015 being the base year) listed in the table which also shows the annual rate of inflation: Ycar 2015 2016 2017 2018 Price 250 270 290 3u0 Inflation 6% #here 1 the Iast three digits of your student code (for example: if a student code is 17071435 then 4J= a/ Mf the index number of the real price for 2019 is [05 and the rate of inflation for this ear S"/_ work out the nominal value of the price in 2019: 6/ If the index number of the real price for 2014 is 90, work out the nominal value of the price in 2014-



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A small nation of ten people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts:
(TABLE CAN'T COPY)
a. Using a method similar to the CPI, compute the percentage change in the overall price level. Use 2017 as the base year and fix the basket at 1 karaoke machine and 3 CDs.
b. Using a method similar to the GDP deflator, compute the percentage change in the overall price level. Also use 2017 as the base year.
c. Is the inflation rate in 2018 the same using the two methods? Explain why or why not.

The solution to the question is it is given that C. P. I. Of certain country has given by I. T. Equals two minus 0.2 tq plus 0.4 T square plus 1 20. Where t ranges from 0 to 4 And where tea is zero corresponds to the beginning of 2013. The C. P. A. At the beginning of 2014 S. T. Equals to one which as equals to Hayak one equals minus 0.2 into one Q 0.4 into one square plus 1 20. Which will be equal to 1 20.38 high as well. Now the rate of change of C. P. I with respect to T. That is I Dashti will be called to minus 0.0 60 square plus 0.8 T. Now at the beginning of 2014 that is that equals to one I. Dash one Will be equal to 0.74. Therefore the annual percentage rate of inflation in CPR of the country at the beginning of 2014 will be given by 100 into high dash of one by high of one, which is 100 into 0.74 by 1 20.38 voicing Which will be able to 0.615%. Thank you.

So in this we have to calculate inflation rate using GDP deflator as well as consumer price index. So whenever we find have to find the inflation rate between two years what we'll do we'll do we'll take the GDP deflator in the frontier and we will deduct from a GDP deflator of the previous year and divided by the GDP GDP deflator of the previous year and multiplied by 100 to get the percentage. Now if we took the inflation rate from 2011 to 2012 then GDP deflator in 2011 that is 105.0 to minus GDP deflator in 2011. That is 103.199. Not divided by GDP deflator in 2011 that is 1.3. 103.199. Multiplied by 100. So what we get us 1.7% inflation rate between 2011 and 2012 weighs 1.7%. Similarly we have to find it for 2013. So deliberative later in 2013 -GDP deflator in 2012 divided by GDP deflator in 2012 multiply 100 what we get us 1.5%. Similarly we can find it for cp So cP I against the same concept applies to cP. So in order to find the inflation between two years we will take the C. P. A. In the granted and from it we will deduct the C. P A. In the previous year then we were divided by the C. P. A. In the previous year and multiplied by the 100 now. So we have to find inflation between 2012 and 11. No C p. A. In 2012 minus C. P. A. In 2011 divided by C. P. A. In 2011 and we multiplied by 100. So what we get Answed is 2.1 person. Similarly for 2013 We get CPI A. in 2013 minus C. P. A. In 2012. And then we divided by C. P. A. In 2012 and we multiplied by 100. So what we get answer this 1.5% inflation raid using Cpr between 2013 and 2012 is 1.5%. So this is the answer we get.

Hey guys and welcome to another economics example where we're gonna be looking some more inflation. So for this example we're gonna be looking at a basket of goods which I've written the dollar amount for four years here. And what we're going to be trying to figure out is does using different base years um you know change the level of inflation. So for this example here I've already done the math for all this thankfully. Um So for a here using year one as your base here, that would mean that year one is automatically 100 you can't count inflation for the first year. Um Your second year your index is going to be one of three .19 by the way. I should give you guys the calculations I was using. Um And it's the for the index it's your your basket price um in your current year divided by your basket praise in your base here. Um and of course times by 100. And then for inflation that is, I'm not dealing with a whole lot of room here. So the equation of music here for inflation is your um hey, uh huh. New your new index minus your old index Divided by Old Times 100. So with that out of the way, let's continue writing these numbers down for the index for the year three is 106.38 man, I don't have a lot of room. And then for the fourth year it's 1 13. Yeah point eight three. And I have rounded these numbers down to two decimal places. So there might be some minor differences depending on how you do that. So if you're using your one as your base here, let's go ahead and calculate the inflation. So we can't calculate the inflation for the first year because there's no preceding year to compare it to. But after that we can so in the year to the inflation from year one is 3.19%. After that it's 3.9%. And after that it is 7%. Yeah. All right. So now we'll move on to the second question, which is where we use a year four as your base year. So for a we're using this as our base here, and for B we're using your four $1,070 um as our base here for the price for the basket of goods. So let's go ahead and get into the indexes. So for here The index for the first year is 87 0.85 For the second year, it's 90 0.65 For the third year, it's 93 .46. And then since the fourth years, the base here, that's always 100. All right, so now let's get down to inflation using the equation I wrote up there. Um So again, we can't measure inflation in the first year because there's nothing to compare it to, but we can go ahead and do it in the second year And that is also 3.19. Um And then for the third year it's Three, if you round it up it actually comes to 3.1, but that might be because the equate when I was measuring inflation, I was already using around in numbers from when I made the index. So yeah, keep that in mind. And then the Um inflation for the 4th year rounded rounds up to seven. So there is a subtle difference here but for all intents and I think that comes down to me um using the reduced forms of the indexes in my inflation calculation. But for all intents and purposes, um you know, it doesn't, at least for this example, doesn't matter which year you're using as your base here to measure inflation. It will come out the same. Whether it is older or newer shouldn't matter. So yeah, that's it for this example, and we'll see you guys in the next one, farewell. Oh, there it is.

Okay, everybody, this is Chapter 24 problems. Five were given the information that we have in this table here, not the quantities in the total price of karaoke machines and the quantities and the price of the CDs. And we're asking the first part to calculate inflation. Anything that Khun Fewer Price Index method with the basket good being one carrier to machine through CDs. So the first thing we have to do is we have to calculate the per unit price. And so, for 2,017 the price is $40 for 10 Carrie Okie machines that equals $4 and it's $10 for 30 Stevie. So it's 33 cents per CD in 2,018. That's $60 divided by 12. Carrier to machines equals $5 and we have $12 over 50 CDs equals 24 cents. Remember to calculate the consumer price index. The formula is on the current basket of guns over the base year mask. Inexperienced times 107 over the basket of goods is born Carioca Machine and three CDs. So that consumer price and next for 2,017 is for 99 over for 99 times 100 equals 100. The base year for the consumer price and what's is always going to people. 100 for 2,018 This t p I is $5 in 72 cents over 4 99 times 100 equals 115. They were calculating inflation, which is the change in the price level. It was the c p. R. For the current year, my ass. The CPS after the base here over this t p r for the base here times one from dreams which equals 15 3 in 15% inflation. Blue second part so jumbled. The second part here is asking for us to Catherine in freezing. Using the GDP deflator to the GDP deflator is a different way of measuring inflation. It's just a ratio of nominal to real Jean 17. Do you flayed her? Is the ratio of nominal Janey P over real GDP now novel Jeep is the current output at current prices and the real GDP is current output out of the base year. President, Given our table, our normal GDP is 72 72 right that $60 plus $12. That's the 20 times. The current price is 40 times the current price. Our real GPS and this is nominal. Real GDP is going to be 48 plus 16.5 when she goes 64 0.5. You get that 64.5 because it's the quantity in 2,000 18 times the price, which was $4 plus the quantity times the price, which was 33 cents. So then the GDP different. It's it's nominal, divided by real GDP in that equals about 12% and knows that the two members are not different, which is two numbers are not the same, which is the third question orbit to the same. Why or why not? Of course the answer is no and the reason is because of the basket of goods for the different measures. It is different the basket of goods for the consumer price in next month's one carrying arcade machine and three CDs, whereas the basket of goods for the GDP deflator. What has all goods produced in the economy during that period? So this wass, after 24 problems


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