Answer:
True.
Explanation:
Price changes no more frequent than once a quarter is a true statement.
Answer:
Option (d) is correct.
Explanation:
Given that,
Current wage rate of the workers = $8 per hour
Current year CPI = 160
Previous year CPI = 128
Inflation rate:
= (Current year CPI - Previous year CPI) ÷ Previous year CPI
= (160 - 128) ÷ 128
= 32 ÷ 128
= 0.25 or 25%
Therefore, the firm should increase the hourly wages of its workers by:
= Inflation rate × Current wage rate of the workers
= 25% × $8 per hour
= $2 per hour
Answer:
0.25
Explanation:
Given :
The the non defective cars =
We will consider all the defective only. This is only because the value of the used car is $ 2000 and it is lower than the price of a good car that is $10,000. Thus only defective cars are being sold as the old cars.
For a risk neutral customer, the price that he is ready to give for the new car is the reservation price of a non defective car. It means that (the amount of $ 8000 is the value of the good car x chances of getting a good car) +( the value of the bad car x chances of getting a bad car).
Since we know that x is the fraction of all the cars sold in the market are defective, it means that the fraction of the good cars is 1 - x. Thus putting the values,
= 0.25
Thus the value of :
Answer:
The complete table is attached.
Explanation:
Use the fact that nominal GDP = price of cupcake in current year x quantity of cupcake in current year + price of envelope in current year x quantity of envelope in current year
Real GDP = price of cupcake in base year x quantity of cupcake in current year + price of envelope in base year x quantity of envelope in current year
We find that, for example, nominal GDP 2013 = 4*150 + 2*180 = 960 while real GDP 2013 = 2*150 + 5*180 = 1200.
Hence deflator 2013 = nominal GDP 2013/Real GDP 2013 = 960/1200 = 80.
From 2013 to 2014, nominal GDP decreased , and real GDP decreased .
The inflation rate in 2014 (42 - 80)*100/80 = -47.50%
Real GDP is a more accurate measure because it is not influenced by price changes, but nominal GDP is.