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Imagine that a hypothetical economy produces three items food, clothes and Aluminum and a typical consumer buys food and clothing only. The table below shows
Imagine that a hypothetical economy produces three items food, clothes and Aluminum and a typical consumer buys food and clothing only. The table below shows the hypothetical results. Item Price/unit (2009) Qty (2009) Price/unit (2008) Qty (2008) Food TK. 40 100 Tk. 20 50 Clothes Tk. 200 20 Tk. 100 10 Aluminum Th. 2000 8 Tk. 1000 4 Base year: 2008 Question 1. a) Calculate GDP Deflator of 2009. b) What can you conclude from your answer to part a. c) State two reasons why GDP is not a perfect measure. Question 2. a) Calculate the CPI of 2009. b) Calculate the inflation rate of 2009. c) If the bank interest rate was 5% in 2009, what was the real interest rate in 2009? d) State two reasons why CPI is not a perfect measure. 3. The Bangladesh Bureau of Statistics report that the population of the country in 2010 was 120 million of which 75% were adult. If the number of people employed was 40 million and the number of people unemployed was 10 million and discouraged workers were 5 million then calculate a) unemployment rate of 2010. b) labor force participation rate of 2010. c) State two reasons why unemployment rate is not a perfect measure
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