1. Use the following information to answer question 1. Year GDP Deflator 1939 B.25 2009 90.8 2015 100 2022 121.2 The top grossing film of all time, in nominal terms, is Avatar, which earned $2.78 billion dollars in 2009. By comparison, Gone with the Wind, which was released in 1939, earned only 390 million dollars (.39 billion). a. Calculate how much each film grossed in 2015 dollars. b. Calculate how much each film grossed in 2022 dollars. b . Assume that inflation in 2023 was 3 perceni. a. What was the growth in nominal GDP if real GDP grew at 4 percent? b. What was the growth in real wages if nominal wages grew at 4 percent? 3. In 2023 food prices and housing prices increased faster than average. a. Based on this information, which index likely showed a faster increase in 2023, the CPI or the CPI core? Why? b. Which index likely increased more, the CPI or the PCE?. Why? 4, Assume that you are an economic advisor to a labor union. The union is negotiating for a cost of living contract which will index worker's wages to inflation (i.e. automatically increase wages when inflation increases). a. Which index would you prefer as a measure of inflation: CPI or PCE? Why? b. Bonus. Suppose the choice is between the CPI or Core-CPI. Which index would you prefer in this case? Assume that you are not sure whether food and energy prices will increase faster or slower than average. 5. Assume that real money demand (M/P) is related to income as follows: (M/P) = .04Y a. What is the velocity of money in this case? b. Suppose nominal money supply (M) equals 100. What is the value of nominal GDP? c. What would happen to the price level if people started holding five percent of their income in the form of money, rather than four percent (increase, decrease or no effect)? Explain. . The following table shows the rates of money supply growth (m), velocity growth (v), output growth (y), inflation (] ]), nominal interest rate (i) and real interest rate (r). Complete the missing parts of the table. Assume that expected inflation equals actual inflation. m v 11 y 1 r 10 0 o 3 1 6 -1 o 7 2 1 7 2 8 1 7. Watch the video \"Living with nearly 100% inflation\" by Vice news on Youtube and answer the following questions. a. Provide an example from the video of how money's use as a medium of exchange is being weakened by the inflation in Argentina. b. Provide an example of menu costs from the video. . Inflation can affect different income groups differently. Which group do you think is most adversely affected by the inflation in Argentina: low income, middle income or high income? Explain, giving a specific example from the video. 8. Consider an economy described by the following equations: Y =C+I+G Y = 6,000 G=1,300 T = 1,000 C=250+.75(Y - T) I1=1,100 - 50r a. Calculate private saving b. Calculate national saving c. Calculate the equilibrium interest rate 9. Use the loanable funds model to explain what happens to the level of investment and the real interest rate as a result of technological improvements in several major indusiries, including green energy, pharmaceuticals and communications. Use a graph in your answer, labeling both axes and all curves