Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Measurement of Inflation (80 points) In Happy land, there are only 4 goods: Cheese, movie, gasoline and popcorn. The following table shows the prices and
- Measurement of Inflation (80 points)
In Happy land, there are only 4 goods: Cheese, movie, gasoline and popcorn. The following table shows the prices and quantities produced of these goods in 2018, 2019, 2020 and 2021:
2018 | 2019 | 2020 | 2021 | ||||||
Market Basket Items | # of units | $ per unit | Total cost | $ per unit | Total cost | $ per unit | Total cost | $ per unit | Total cost |
Cheese | 3 | 1.75 | 1.5 | 1.5 | 1.65 | ||||
Movie | 2 | 12 | 13.5 | 15 | 18 | ||||
Gasoline | 10 | 1.25 | 1.6 | 1.8 | 2 | ||||
Poporn | 50 | 1 | 1.05 | 1.2 | 1.25 | ||||
Total |
- Fill in blanks in table (20 points)
- Using year 2018 as base year, calculate the index number for each year. (20 points)
Year 2018 Index =
Year 2019 Index =
Year 2020 Index =
Year 2021 Index =
- Calculate inflation rate since previous year based on your calculation from b. (10 points)
Inflation rate of year 2019 =
Inflation rate of year 2020 =
Inflation rate of year 2021 =
- Using year 2020 as base year, calculate the index number for each year. (20 points)
Year 2018 Index =
Year 2019 Index =
Year 2020 Index =
Year 2021 Index =
- Calculate inflation rate since previous year based on your calculation from d. (10 points)
Inflation rate of year 2019 =
Inflation rate of year 2020 =
Inflation rate of year 2021 =
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started