Questions 1

Refer to the information given below

Year	Price of a Guns	Quantity of Guns	Price of Apple	Quantity of Apples
1999	$ 50	3	$ .5	1000
2000	$ 60	3	$ .75	900
2001	$ 70	1	$ 1.00	950

Use 1999 as the base year. Calculate the inflation rate between 2000 and 2001.

1. Calculate CPI for the year 2000.
2. Calculate CPI for the year 2001.
3. Calculate inflation rate between 2000 and 2001.
4. Interpret inflation rate:

Question 2

Fill out the following table. If for example, consumption will increase as a result of the transaction, show it as . If it decreases, show it as . If there is no change, show it as --.

Transaction	C	I	G	NX	GDP	GNP
Example: You bought burger and fries at Kudu
A company in India bought oil from Saudi Arabia
ARAMCO bought new machinery from Germany
The Saudi government built a school
A Chinese company in Saudi Arabia paid taxes to the Saudi government
The Saudi government paid money to help unemployed people
A Saudi imported a laptop from Taiwan
A Japanese company produced plastic in Saudi Arabia

Question 3

Refer to the information given as below find:

1. The Nominal GDP for each year.
2. The Real GDP for each year.
3. The GDP Deflator for each year. Using 2011as a base year.

	Bread	Butter	Milk
Year	Price	Quantity	Price	Quantity	Price	Quantity
2011	2.00	1400	15	100	7	120
2012	2.50	1500	18	110	8	150
2013	3.00	1600	20	120	8	160

Question 4

Using the outline below, draw a circular-flow diagram representing the interactions between households and firms in a simple economy. I F