it is my macroeconomics class.Consumers in 11 country hay 11111 Ilacc maga/mem, movie tickets and...

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it is my macroeconomics class.Consumers in 11 country hay 11111 Ilacc maga/mem, movie tickets and pi/zus. The prices and quantities purchased by urban 111,1140101db are in the table above. If 201 I is the trihreace base year. a) The cost of the CPI market basket in the base year Is? l o Clear and need to show steps. b) If the eurmnt year its 2012, the cost of the CP1 market basket in 201 2 is? Show steps. c) The CPI2011? Show the calculation. Explain d) The CP13e13? Show the calculation. Explain et What is inflation and deflation? What is the inflation rate? Show the steps and calculations. Il What is real wage and nominal wage? Explain gl Suppose. nominal wage is $ 20 an hour in 2011. Calculate the real wage for 2011. Show the steps and calculations. h) Suppose. real wage is 25$ nn hour in 2012. calculate the nominal the wage. Show the steps and calculations. Now. Suppose reference base period-year is the 2012, The CPI2011? Show the calculation. Explain. j) The CP12012? Show the calculation. Explain. k) Recalculate the inflation rate. Show.4) If the nominal wage is $30 in 2011 and the CPI is 202 in 2011, then the real wage in XXXXXXXXXXdollars? Show the calculation and the steps.5) In June 1960, the price of gasoline in LA was $0.169 per gallon and the CP1 was 29.6 with a base period of 1982 to 1984. What was the real price of gasoline per gallon in base period dollars? Show the calculation and the steps. .v 6) Citicorp charges 11 percent interest rate on all new car loans. If the inflation rate is 6 percent, Citicorp receives a real interest rate of? Show the calculation and steps. t,t.—_7) Why we experience biases in CPI calculation? Explain. Note: Problems 1-7 are lOpts each, except Problem 3. Problem 3 is 40 points. In order to get Fl Ili. CREDIT. your answer must be neat, well organized and provides sufficient evidence-explanation to support your conclusion.

David · Accepted Answer

Solution 3:
a) The value of the market basket is the sum of the quantity of each good included in the basket multiplied by its price.
Value of market basket in 2011 = 400 x $5 + 50 x $6 + 100 x $10 = $3300
b) Value of market basket in 2012 = 450 x $4.50 + 200 x $8 + 120 x $10.50 = $4885
CPI market basket = Value of market basket in 2012/ Value of market basket in 2011 x 100
                            = $4885/$3300 x 100
                            = 1.480 x 100
                            = 148.0     
c) The CPI is the ratio of the value of the market basket in a given year to the value of the market basket in the base year multiplied by 100.

it is my macroeconomics class. Consumers in 11 country hay 11111 Ilacc maga/mem, movie tickets and pi/zus. The prices and quantities purchased by urban 111,1140101db are in the table above. If 201 I...

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