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Range of Uncertainty in the Price Level & Inflation

Suppose that the Fed is required to keep the inflation rate between 1 percent and 2 percent a year but with no requirement to keep trend inflation at the midpoint of this range. The Fed achieves its target. a. If initially the price level is 100, i. Calculate the highest price level that might occur after 10 years. i

Assess demand-pull.

Some events occur and the economy experiences a demand-pull inflation. a. List the events that might cause demand-­pull inflation. b. Describe the initial effects of a demand-pull inflation. c. Describe what happens as a demand-pull inflation spiral proceeds. Figure attached**

Zimbabwe's Devaluing of Its Currency

Zimbabwe devalued its currency in mid-2006 essentially turning a $20,000 Zimbabwe bill into a $20 bill. People were permitted only 3 weeks to turn in their old currency for new notes, individuals were limited to $150 a day, and companies were restricted to $7,000. Who do you think were the losers from this devaluation, especiall

Monetary policy

How does a change in monetary policy on the part of the Fed impact nominal interest rates, the consumer price index, and inflation rates? How are the current real stock of money in the US and real interest rates computed?

Real vs Nominal GDP: Sample Calculations With Explanations

Given a table of data comprising real GDP and its components over a number of years, compute compound annual percentage changes in real GDP (economic growth) and compute the shares in real GDP. Evaluate changes in economic growth. See the attached file. Complete the table and answer the following questions: What's the differ

Nominal GDP and real GDP.

Why is it important for a country to calculate their GDP and release this information to the public? Would it matter if they only reported nominal GDP and not real GDP? The calculation of GDP does not include everything, such as non-market and illegal activities; explain the relative importance of this for a country.

Calculations involving the Consumer Price Index (CPI)

Consider the price index in the attached file. What are the values for A, B, and C? Was there inflation from 2006 to 2009? If the price changes above occurred for all goods across the economy during the four year period, explain how nominal GDP and real GDP would differ.

FED's Actions in Stopping Inflation

The Economics in Practice describes the increase in food prices around the world in 2008. Since food, in large measure, affects the real income of households, increasing prices will eventually push up wages and have an impact on the aggregate supply curve. Central banks were very worried about the prospects for inflation becomin


1.Explain the various types of inflation and its consequences. 2.Describe the difference between inflationary gap and deflationary gap.

How the Fed uses the Money Multiplier to fight inflation

Why do you think the Fed evaluates the money multiplier when making decisions with regard to the money supply? What function does the money supply serve in our economy to influence certain economic variables? Why does the Fed like to fight inflation in our economy and is inflation a concern right now given our current economic s

Sustainable primary surplus/deficit

A.Calculate the sustainable primary surplus/deficit for each country and identify which countries (if any) have a potential debt crisis on their hands. b. For any countries with an unsustainable debt path identify possible changes that could bring the country back to sustainability. Country debt/gdp Primary balance N

Gross Domestic Product

GDP is a less than perfect measure of economic well-being. It may be faulted for each of these practices EXCEPT that it: does not take leisure time into account. involves multiple counting. does not take psychic costs into account. does not take psychic income into account. Net dome

Measuring Inflation

In the United States of Albion, expected inflation is 5% and the real interest rate is 2%. (a) What is the nominal interest rate? (b) If inflation turns out to be 10% instead, what is the ex post real interest rate? Who gains and who loses from this error in forecasting inflation? (c) Recalculate your answers for (a) and (

Economy Overview

What are the different types of unemployment and how do they affect the economy? What is inflation? What is deflation? What is recession? What are the problems of the current US economy?

Nominal vs. Real GDP

Consumer Price Index (pound of corn) Year Current Price Base Year Price Price Index 2006 $1.00 $1.00 100 2007 $1.25 A 125 2008 $1.34

Economic Princples

Please explain in detail to improve my understanding of these questions. 23-4 Why is there a trade off between the amount of consumption that they can enjoy today and the amount of consumption that they can enjoy in the future? Why cant people enjoy more of both? How does saving relate to investment and thuus to economic g

Calculating and Assessing Inflation Rates

Please help me with the following problems. 1. Complete the table (see attached) by filling in the banks. 2. Which Decade has the most inflation? 3. How much did consumer prices change during the Great Depression from 1930 to 1940. 4. In 1925, the cost of a Model T Ford was $290. What is the equivalent cost at 2008 pric

Economy Exercises: Consumer Price Index

Hello, I need help answering the following exercises. 1. A company dedicated to tabaco has a cost and revenue function of: CT= 20 + Q + Q2 (q squared) I= 15Q - Q2 (q squared) Determine the maximum and minimum amounts that can be produced where there is neither loss or gain. 2. If the consumer price index in 2002 i

Government intervention in conditions like inflation

Based on the "10 Principles of Economics" please help to answer the following questions. 1. Under what conditions might government intervention in a market economy improve the economyâ??s performance? Give at least two examples. 2. Explain how an attempt by the government to lower inflation could cause unemployment to in

Ramifications of unemployment

Some people believe that 0% unemployment, where everyone who wants a job, has a job and 0% inflation, where prices remain the same year after year, are ideal policy targets for the U.S. economy. Would you recommend a policy target of 0% unemployment and 0% inflation? What implications would these policies have on the economy a