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Inflation

Inflation, currency appreciation/depreciation and trading partners.

Explain whether you agree or disagree with each of the following statements. a) A nation's currency will depreciate if its inflation rate is less than that of its trading partners. b) A nation whose interest rate falls more rapidly than that of other nations can expect the exchange value of its currency to depreciate. c

Macroeconomics

The topics of macroeconomics--inflation, unemployment, interest rates, and exchange rates--are the subject of newspaper headlines and television stories everyday. In your own words, discuss how these concepts relate to each other.

Definition of six indicators for Starbucks service store

I need around 1000 word. Define each of the six indicator for starbucks (interest rate, housing starts, auto sales, foreign exchange rate, producer price index, and oil and fuel prices). and describe its current status, also present a separate graph for each indicator, illustrating each historic trend. Analyze the relationshi

Inflation and Aggregate Demand and Supply

Having problems with the three questions below. 1. Consider the following price information: Year 1 Year 2 Cup of coffee $.50 $1.00 Glass of milk $1.00 $2.00 (a) Based on the information given, what was the inflation rate between year 1 and year 2? (b) What happened to the price of coffee relative t

Labor Force, Inflation Rate

The size of the labor force in a community is 500, and 400 of these folks are gainfully employed. In this community, 100 people over the age of 16 do not have a job, and are not looking for work. In addition, 200 people in the community are under the age of 16. The unemployment rate is...? Suppose nominal GDP in 2000 was $8 t

Overvalued

Based on the analysis you did on CPI's valuation and in the context of the valuation of the major consumer products companies (look at the price-to-earnings ratio of CPI versus the competitors), do you believe analysts think your firm is undervalued? Could that perception change if the economic climate changes? Do you believe CP

Relating an Article to Economic Theory: Example Problem

I have an article and I have summarized the facts. Please help me to relate these facts to economic concepts. I need to understand which economic ideas are relevant to the article and how, and I need to be able to understand them enough so that I can build on them for the rest of the project. I also need the necessary graphs

Help With Monetary Policy

1) By law the Federal Reserve is required to pay attention to both unemployment and inflation. How does the Federal Reserve accomplish these goals? 2) What are the pros and cons of using contractionary and expansionary monetary policy tools under the following scenarios: depression, recession, and robust economic growth? 3

CPI and Interest Rates

Based on the chart below, in which year is it best to be a saver? Best to be a worker? Worst to be a saver? Worst to be a worker? year money/wage cpi interest rate 1999 7.50 106 6% 2000 7.90 105 7% 2001 8.20 114 8% 2002 8.40 120 7% 2003 8.80 121

Reproduction Cost

A 4-year-old building that originally cost $100,000 burned down. The rate of inflation of building costs has been 5 percent per annum. The current reproduction cost of the building is a. $121,550. b. $120,000. c. $83,333. d. $82,304. e. $100,000. You've just won the $25 million lottery. You are going to receive a chec

Estimating NPV

Assume that a less developed country called LDC encourages direct foreign investment (DFI) in order to reduce its unemployment rate, currently at 15 percent. Also assume that several MNCs are likely to consider DFI in this country. The inflation rate in recent years has averaged 4 percent. The hourly wage in LDC for manufactu

Inflation, unemployment, and the business cycle

Explanation of the following two bullet points: ~Analyze the relationship among inflation, unemployment, and the business cycle ~Assess the impact of inflation, unemployment, and the business cycle

Price Index Overstated and the Effect on Inflation

7. Real GDP is computed by dividing nominal GDP by a price index. If the price index overstates the current price level since the base year, we can expect: A. the measurement of real GDP to be understated relative to the base year, and the inflation rate reported to be too high. B. the measurement of real GDP to be overstate

Trying to understand Microeconomics

a. What is the relationship between inflation and unemployment (in numerical, percentage value, the natural rate of unemployment) and the danger we face if the unemployment rate drops below that natural rate. What percentage is the Natural Rate of Unemployment? b. What is the definition of Gross Domestic Product (GDP) and i

Three functions of money

What are the three basic functions of money? Describe how rapid inflation can undermine money's ability to perform each of the three functions.

Real Change in Net Worth

In 1970, Bill Gates' net worth was $1, 692. At that time, the CPI was 51.3. In 1999, Bill Gates' net worth is $51,344,629,323. The 1999 CPI is 232.6. Rounded to the nearest dollar, what has been the real change in Bill's net worth?

Average Annual Inflation Rate with Actual Prices Adjusted

Thirty years ago, the price of a new Volkswagen was $5,000. (Actual price adjusted to simplify the calculation). The price of a new Volkswagen is $20,000 today. Basing your answer solely on the aforementioned prices, by what percent have prices increased over the past thirty years? What average annual inflation rate would have

Replacement cost decisions

Cotner Clothes Inc. is considering the replacement of it old, fully depreciated knitting machine. Two new models are available: Machine 190-3 which has a cost of $190,000, a 3 year expected life, and after tax cash flows (labor savings and depreciation) of $87,000; and Machine 360-6 which has a cost of $360,000, a 6 year life, a

Measures and Indicators: GDP, national income, unemployment, inflation

My reference organization is Walmart Referring to indicators of performance, particularly indicators of improving or decreasing levels of performance used by Walmart. Please address the following questions: 1. What are the three best macro-economic indicators that you could use to assess conditions that apply to Wa

Inflation and Interest rates

Explain as carefully as you can why borrowers would be willing to pay a higher interest rate if they expected the inflation rate to increase in the future.

Government Budget, Labor demand, Equilibirum

What are government's fiscal policy options for ending severe demand-pull inflation? Use the aggregate demand-aggregate supply model to show the impact of these policies on the price level. Which of these fiscal policy options do you think might be favored by a person who wants to preserve the size of government? A person who

CPI + S/D diagram

A) Suppose that several months of data showed the CPI increasing at a 1% annualized rate down from previous 4% rate and this caused expectations of annual inflation to also decrease from 4% to 1%. Assume, at the same time that fears of recession and default on corporate and asset backed bonds reduced the expected real rate of r

Using the Fisher Effect

Examine the exchange rate of the U.S. dollar to the Japanese yen in January 2005 versus January 2006. 2. Compute the appreciation or depreciation of the U.S. dollar relative to the Japanese yen. 3. Check the U.S. inflation rate for 2005 and apply the Fisher effect formula. (Please explain the formula and how you got

Calculating inflation rates using Fisher Effect

1. Examine the exchange rate of the U.S. dollar to the Japanese yen in January 2005 versus January 2006. 2. Compute the appreciation or depreciation of the U.S. dollar relative to the Japanese yen. 3. Check the U.S. inflation rate for 2005 and apply the Fisher effect formula. (Please explain the formula and how you got t

Macroeconomics

Suppose worker productivity increased at the rate of 1.9% per year. If the labor force grew by 1.5% per year, what rate of increase in RGDP would be sustainable without increasing inflation pressures?

Inflation

Suppose that initially actual and natural real GDP both equal 11,000 and that the rate of inflation is 3.5 percent. Natural real GDP grows by 3 percent per year over the next five years. Actual real GDP decreases by 2 percent in the first year, but then grows by 4 percent in the second year, 5.5 percent in the third year, 4.2 pe

current real stock of money in the US

I need help in Managerial Economics I am using Economics for managers BOOK: ECO 550 STRAYER UNIVERSITY 2008 CUSTOM EDITION; ECONOMICS for MANAGERS: ISBN- 13: 978-0-558-03749-9. Please should step by step detaileds in solving the problem. Real Interest Rate Given 2005 data where nominal money supply (M1) $1,374.5 Billion,

Economics

Help in answering these questions. Answers should be 250-300 words each. 1 Inflation is the general increase in prices with some prices rising faster than average and even some prices falling. Inflation attracts a great deal of attention among policy makers and some of the remedies for it can have serious consequences in pr

Calculating the Inflation Rate

Question: If the CPI was 110 last year and is 121 this year what is this year's rate of inflation? What is the "rule of 70"? How long would it take for the price level to double if inflation persisted at: (a) 2 percent per year? (b) 5 percent per year? (c) 10 percent per year?