Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What do you mean by Price index?
Because we are only interested in percentage change of the price level and not particular value, we can divide every price level by a given constant so that numbers are easier to deal with.
When we divide a series of price levels by a constant we end up with what is known as a time series of price indexes.
Using same basket as above, if we divide entire series by 607.70 we get following time series of price indexes:
Point in time
Jan 1, 2008
Feb 1, 2008
March 1, 2008
April 1, 2008
Price index
100
102.68
103.42
Reason for choosing 607.70 is that we want the index to be equal to 100 for the first point in time. Benefit of having an index which starts with 100 is that we would have a clearer picture of evolution of prices. We can, for instance, immediately determine that prices rose by 2.68% on average in January and by 3.42% during three months January to March.
Note that percentage change of the original price level and percentage change of price index is the same. Percentage change won't depend on which point in time we select as our 'base' (giving the price index a value of 100). Using price index, percentage change during January is (62400 - 60770)/60770 = 2, 68% that is exactly the same as percentage change of the price index.
Assume an economy that is operating above full employment. A. Draw a correctly labeled AD/AS graph showing: i. the problem in the economy ii. current price level and output iii. fu
At first, Say's Law may seem 'obvious'. Though, it's not - actually, it's highly controversial. The reason it may seem obvious is that you have perhaps learned from microeconomics
Determine about the interest rates The interest rate may be fixed or floating. If it is fixed, you will pay the same percentage for the entire duration of the loan. With a floa
Recognize which of the following purchases is counted as a part of NI: a) Tata motors purchases tire from Good year to equip latest Indica. b) Tata motors purchases tires fr
Suppose the annual demand function for the Honda Accord is Qd = 430 - 10 PA + 10 PC - 10 PG where PA and PC are the prices of the Accord and the Toyota Camry respectively (in thous
Relation between nominal interest rate, real interest rate and inflation If we denote the nominal interest rate by R, the real rate by r and the expected inflation by p e then
Use a graphical illustration to describe briefly what the influence of each of the following would be on the market supply of labor:(a) an increase in immigration (b) more women en
Beverly enterprises owns a nursing home that is currently earning $2.0 million in cash flow on an annual basis, but this amount is expected to drop in the future. The nursing home
Explain whether, the following statements are TRUE, FALSE or UNCERTAIN. Briefly justify your answer. (i) The circular flow shows how real resources and financial payments flow
If population growth is greater than the growth of real output, A. real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd