5. Why, in the opinion of many economists, does the US government measure both a GDP...
5. Why, in the opinion of many economists, does the US government measure both a GDP deflator and a CPI? Historically how have the two been related in practice? Note, if there are any significant differences between the two measures, I am asking you to describe them. If one of the two measures shows more ”inflation” on a consistent basis, give two reasons why this is the case. In addition to the CPI, the government also measures a Producer Price Index. Which of the two (CPI or PPI) has shown the highest increase in price levels in the US since the early 1970’s?
Homework Answers
GDP deflator and CPI give a realistic picture of the inflation over a period of time. The US government considers both a GDP deflator and a CPI for the calculation of inflation. This is because CPI considers the increase in price for a particular basket of goods which does not change from time to time. However, GDP deflator does not consider the fixed basket of goods and it changes from year to year based on the consumption and investment pattern. Thus it is more reliable as it gives a true picture based on actual investment.
CPI has shown the highest increase in price levels in the US compared to PPI as the number of middlemen have increased who have actually raised the price of the finished goods available to consumer.
Add Answer to:
5. Why, in the opinion of many economists, does the US
government measure both a GDP...
Question 12 0.25 pts 12. Changes in the producer price index tend to ___changes in actual...
Question 12 0.25 pts 12. Changes in the producer price index tend to ___changes in actual producer costs. O a. overstate b. understate O c lag behind d. precede Question 13 0.25 pts 13. Trends over the last 70 years for the consumer price index (CPI), producer price index (PPI), and gross domestic product (GDP) deflator show that: a. They exhibit identical patterns. b. They have changed in similar but not identical patterns. c. The GDP deflator has shown considerably...
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy
Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The CPI for this year is calculated by dividing the _______ using by the _______ using and _______ multiplying by 100. However, the GDP deflator reflects only the prices of all...
QUESTION 1 According to the classical economists, those who are not working have chosen not to...
QUESTION 1 According to the classical economists, those who are not working have chosen not to work at the market wage. are unable to find a job at the current wage rate. have given up looking for a job but would accept a job at the current wage if one were offered to them. are too productive to be hired at the current wage. QUESTION 2 Which of the following explains why the long-run Phillips curve is drawn as a...
1. Explain why experimentation is difficult in macroeconomics. And, suppose that you had speed powers to...
1. Explain why experimentation is difficult in macroeconomics. And, suppose that you had speed powers to travel back in time to the Great Depression. What experiment would you like to run on the U.S. economy and why? 2. Assume an economy where there are two producers: a wheat and bread producer. In a given year, the wheat producer grows 30 million bushels of wheat of which 25 million bushels are sold to the bread producer at $3 per bushel, and...
Question #10 homework help ? SUGAR FVATIVES Chapter 22 inflation 10. A fixed-rate mortgage has the same interest rat...
Question #10 homework help ?
SUGAR FVATIVES Chapter 22 inflation 10. A fixed-rate mortgage has the same interest rate over the life of the loan, whether the mortgage is for 15 or 30 years. By contrast, an adjustable-rate mortgage changes with market interest rates over the life of the mortgage. If inflation falls unexpectedly by 3%, what would likely happen to a homeowner with an adjustable-rate mortgage? REVIEW QUESTIONS 11. How do economists use a basket of goods and services...
1. Year Nominal GDP GDP Price deflator Real GDP Inflation Rate
1. Year Nominal GDP GDP Price deflator Real GDP Inflation Rate Growth Rate 2008 $14,833.60 99.23 -- -- 2009 14,417.90 100.00 2010 14,779.40 101.21 2011 15,052.40 103.20 2012 15,470.70 105.00 2013 15,759.00 106.59 2014 17,420.70 108.27 2015 18,287.20 110.01 2016 18,905.50 112.08 2017 19,738.90 114.27 a. Fill in the blanks in the table above and show your work. b. Over this time period, does inflation...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the same as its expenditure because every transaction has a buyer and a seller. 2) GDP is the market value of all final goods and services produced by a country's citizens in a given period of time. [3) If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125. 14) Other things equal, in countries with higher levels of real...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An increase in real GDP of the UNE output of goods and services U 3. Economists use the termino debe overall production levels rising 4. Suppose that a borrower and and then on a loan. Then nation turns out to be the one that the real interest rate on this loans lower than 6. The catch-up effect is deed the property where rich more rapidly...
ΤΕΧΝΙΤΗΤΗ iple Choice y the choice that best completes the statement or answers the question. The...
ΤΕΧΝΙΤΗΤΗ iple Choice y the choice that best completes the statement or answers the question. The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce d. demands 2 The price index was 320 in one year and 360 in the next year. What was the inflation rate? a. 9 percent ((B-A)/A)*100 b. 11.1 percent c. 12.5 percent ((360 - 320)/320)*100 d. 40 percent...
Which form of unemployment will probably last the shortest for a given worker? full unemployment structural...
Which form of unemployment will probably last the shortest for a given worker? full unemployment structural unemployment frictional unemployment cyclical unemployment Question 2 If U.S. Steel Corporation sells sheet metal for car doors to General Motors, the transaction will be counted in the national income accounts as __________. the sale of a producer good between two producers a business investment a temporary investment nothing; the sheet metal is an intermediate good Question 3 Which of the following is a result...
Question 12 0.25 pts 12. Changes in the producer price index tend to ___changes in actual producer costs. O a. overstate b. understate O c lag behind d. precede Question 13 0.25 pts 13. Trends over the last 70 years for the consumer price index (CPI), producer price index (PPI), and gross domestic product (GDP) deflator show that: a. They exhibit identical patterns. b. They have changed in similar but not identical patterns. c. The GDP deflator has shown considerably...
Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The CPI for this year is calculated by dividing the _______ using by the _______ using and _______ multiplying by 100. However, the GDP deflator reflects only the prices of all...
1. Explain why experimentation is difficult in macroeconomics. And, suppose that you had speed powers to travel back in time to the Great Depression. What experiment would you like to run on the U.S. economy and why? 2. Assume an economy where there are two producers: a wheat and bread producer. In a given year, the wheat producer grows 30 million bushels of wheat of which 25 million bushels are sold to the bread producer at $3 per bushel, and...
Question #10 homework help ?
SUGAR FVATIVES Chapter 22 inflation 10. A fixed-rate mortgage has the same interest rate over the life of the loan, whether the mortgage is for 15 or 30 years. By contrast, an adjustable-rate mortgage changes with market interest rates over the life of the mortgage. If inflation falls unexpectedly by 3%, what would likely happen to a homeowner with an adjustable-rate mortgage? REVIEW QUESTIONS 11. How do economists use a basket of goods and services...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the same as its expenditure because every transaction has a buyer and a seller. 2) GDP is the market value of all final goods and services produced by a country's citizens in a given period of time. [3) If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125. 14) Other things equal, in countries with higher levels of real...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An increase in real GDP of the UNE output of goods and services U 3. Economists use the termino debe overall production levels rising 4. Suppose that a borrower and and then on a loan. Then nation turns out to be the one that the real interest rate on this loans lower than 6. The catch-up effect is deed the property where rich more rapidly...
ΤΕΧΝΙΤΗΤΗ iple Choice y the choice that best completes the statement or answers the question. The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce d. demands 2 The price index was 320 in one year and 360 in the next year. What was the inflation rate? a. 9 percent ((B-A)/A)*100 b. 11.1 percent c. 12.5 percent ((360 - 320)/320)*100 d. 40 percent...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago