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!
Give example to calculate the price level
Imagine that we have created a particular basket of services and goods. We calculate price level at four different points in time during 2008 without changing the content of the basket (the weights are unchanged). Assume that we find following time series for price level:
Point in time
Jan 1, 2008
Feb 1, 2008
March 1, 2008
April 1, 2008
Price level
60 770
62 400
62 850
Reason for choosing 607.70 is that we want index to be equal to 100 for the first point in time. Advantage of having an index which starts with 100 is that we would have a clearer picture of the evolution of prices. We may, for instance, immediately determine that prices rose by 2.68% on average in January and by 3.42% during 3 months January to March.
Note that percentage change of original price level and percentage change of the price index is the same. Percentage change won’t depend on which point in time we select as our “base” (giving 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 price index.
What is the meaning of Capital - Gross domestic product By capital we characteristically mean manufactured goods which are used to produce other goods and services though are
what are the factors effecting reciprocal demand?
1. Nations trade what they produce in excess of their own consumption to: A) generate jobs for the domestic economy. B) earn “good will” from the World Bank. C) prevent chronic sur
Movie attendance dropped 8 percent as ticket prices rose a little more than 5 percent. What is price elasticity of demand for movie tickets? Could price elasticity be somewhat over
Snake Farm Inc. (SFI) has been offered to submit a competitive bid for building 31 and 22, 18, and 11offshore pits per year for Athletic Inc. over the next four years. If the bid
Provide an example of a decision in which you faced trade-offs, considered opportunity costs and evaluated the options by comparing the marginal benefits and the marginal costs ass
You should now find a press release from the Board of Governors of the Federal Reserve System, dated December 16, 2009, which discusses the decisions of the Federal Open Market Com
What is the price elasticity of supply? Price elasticity of supply: The price elasticity of supply is a measure of the receptiveness of the quantity of a good supplied to pr
Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc
what is the relationship betwen growth and poverty? either it is positive or negative?
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