Define inflation assume that you live in a simple economy

Reference no: EM13377633

Define inflation. Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2010, fish sold for $2.50 per pound, meat was $3.00 per pound, and fruit was $1.50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5.00 per pound, but fruit prices stayed at $1.50 and meat prices had actually fallen to $2.00. Can you say what happened to the overall "price level"? How might you construct a measure of the "change in the price level"? What additional information might you need to construct your measure?

Reference no: EM13377633

Questions Cloud

1 of us firms with less than 500 employeesnbsp less than : 1. of u.s. firms with less than 500 employeesnbsp less than 25 export less than 40 export less than 5 export over 50

The demand curve as seen by the firm varies with the : the demand curve as seen by the firm varies with the structure of the relevant market. what is the structure for a

Halleys comet has a period of approximately 76 years and it : halleys comet has a period of approximately 76 years and it moves in an elliptical orbit in which its distance from the

Maturity extension program and reinvestment policyunder the : maturity extension program and reinvestment policyunder the maturity extension program the federal reserve sold or

Define inflation assume that you live in a simple economy : define inflation. assume that you live in a simple economy in which only three goods are produced and traded fish fruit

1 employee benefits have become more and more an : 1. employee benefits have become more and more an important part of employee compensation. according to the text

When oprah gave away pontiac g6 sedans to her tv audience : when oprah gave away pontiac g6 sedans to her tv audience was the value of the cars taxable?on labor day weekend in

Moral hazard and adverse selection are both examples ofa : moral hazard and adverse selection are both examples ofa the principal-agentbexternalities in consumptioncefficiency in

Question 1on january 1 2009 heitzman company purchased the : question 1on january 1 2009 heitzman company purchased the following shares as a long-term investment in

User Account

All Pages