Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your Grandpa brags that he paid $3,730 in 1970 for a Ford Mustang 2 door Fastback Boss-302. in November, 2020, he can sell that car

image text in transcribed
Your Grandpa brags that he paid $3,730 in 1970 for a Ford Mustang 2 door Fastback Boss-302. in November, 2020, he can sell that car for anywhere from $83,000 to $136,200, which he tells you is a return in the 10003 of percent, by his math. You know a little something about economies. In macroeconomics, we use an Ination adjuster to express a good sold In 1970 to a comparable price in 2020. So. expressing a 1970 purchase in October 2020 dollars gives me a price of about $25, 600. Your Grandpa brags that he paid $3,730 in 1970 for a Ford Mustang 2 door Fastback Boss-302. in November, 2020, he can sell that car for anywhere from $83,000 to $136,200, which he tells you is a return in the 10005 of percent, by his math. You know a little something about economics. in macroeconomics, we use an ination adjuster to express a good sold in 1970 to a comparable price in 2020. So, expressing a 1970 purchase in Feb 2021 dollars gives me a price of about $24, 774. i use the calculation on the Bureau of Labor Statistics (link: i (WQWWL Using the calculator, lget the result that $136,200 in February 2021 is approximately $20,506 in November 1970.) Suppose your Grandpa suggest to you that he is willing to gift you the money to purchase the 2007 Jeep Grand Cherokee SRT8. He proposes that for about $30,000, you can get a similar deal to what he did with his 1970 Fastback. (1 ) Explain how you might respectfully decline his offer. Explain using terms you learned in this course, giving denitions of course, so that he understands your position. (2) Use what you have learned in the course to make an argument that Grandpa might have earned a greater return on something, anything else. .'Z 3th. \"AI-alt llAll' kmln luau-4' L. LL- __...._- L

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Worldly Philosophers The Lives, Times And Ideas Of The Great Economic Thinkers

Authors: Robert L Heilbroner

7th Edition

068486214X, 9780684862149

More Books

Students also viewed these Economics questions