Question 2b

For Question 1 and Question 2 use the following table to answer the questions. 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. 5 100 Tk. 20 400 Clothes Tk. 100 5 Tk. 400 20 Aluminum Tk. 200 N TK. 800 8 Base year: 2008 Question 1. a) Calculate GDP Deflator of 2009. b) Calculate the Growth rate of real GDP of 2009 c) What can you conclude from your answer to part a. d) What can you conclude from your answer to part b. Question 2. a) Calculate the CPI of 2009. b) Calculate the inflation rate of 2009. c) If your salary in 2008 and 2009 was same, comment on your standard of living in these two years. d) If the bank interest rate was 9% in 2009, what was the real interest rate in 2009? Type here to search