1. Between April 1 and May 1, Bob's price incrdased by <u>$0.50 or 15%</u>.
2. Between May 1 and June 1, Bob's price decreased by <u>$0.50 or 13%</u>.
3. Suppose that atgas station across the street, prices are always 20% higher than Bob's. In absolute dollar terms, the difference between Bob's prices and the prices across the street is <u>$0.1 more expensive</u> when gas costs $3.85 than when gas costs $3.35.
4. Suppose the Fed raises the target for the federal fundsb rate from 2% to 2.25%. This change of percentage points means that the Fed raised its target by approximately <u>0.25%</u>.
<h2>Step-by-step explanation:</h2><h3>1. Between April 1 and May 1, Bob's price incrdased by...</h3><em>Take the difference of the prices to find an absolute value:</em>
$3.85 - $3.35= $0.50.
<em>Use the following formula to find the relative value:</em>
C= |Original value - New value|/ Original value
=15%.
<em>Take the difference of the prices to find an absolute value:</em>
$3.85 - $3.35= $0.50.
<em>Use the following formula to find the relative value:</em>
C= |Original value - New value|/ Original value
=13%.
<em>In this question we are looking for the difference of a difference. </em>
<em>If the proces across the street are always 20% higher, to find how much the gallon costs just multiply the price by 1.20, to increase 0.2 or 20%:</em>
$3.85 * 1.20= $4.62.
<em>Now, to see how much expensive this price is compared to Bob's, take de difference between the prices:</em>
$4.62 - $3.85= $0.77.
<em>Do the same to find the difference between the gas prices when the price is $3.35.</em>
$3.35 * 1.20= $4.02.
$4.02 - $3.35= $0.67.
Now, find the difference of those differences:
$0.77 - $0.67= $0.1.
<h3>4. Suppose the Fed raises the target for the federal funds rate from 2% to 2.25%. This change of percentage points means that the Fed raised its target by approximately (blank).</h3><em>Find the difference between percentages:</em>
2.25% - 2%= 0.0225 - 0.02= 0.0025= 0.25%.
<em>Simpler method:</em>
2.25% - 2%= 0.25%.