Using the table below, find the real value of a payment of $2,400 to be received each year given the following CPI values. Next find the amount that this $2,400 should be adjusted to in order to keep its real value at $2,400. Instructions: Round your answers to two decimal places. Year 2015 2016 2017 2018 CPI 100 103 105 111 Real value of $2,400 2,400 2330.09 2285.71 2181.82 x Cost-of-living adjusted payment 2,400 72 X 120 X 240 x

Using the table below, find the real value of a payment of $2,400 to be received each year given the following CPI values. Next find the amount that this $2,400 should be adjusted to in order to keep its real value at $2,400. Instructions: Round your answers to two decimal places. Year 2015 2016 2017 2018 CPI 100 103 105 111 Real value of $2,400 2,400 2330.09 2285.71 2181.82 x Cost-of-living adjusted payment 2,400 72 X 120 X 240 x

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter6: How Statisticians Measure Inflation

Section6.A: How Statisticians Measure Inflation

Problem 5TY

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Bike Washer car TV Yr1 300 1560 5600 52 Yr2 310 1570 5610 53 Y3 325 1585 5650 54 Yr4 350 1610 5700 55 Using the information above -Give the consumer price index for years one, two, three, and four -State what the percent rate of change in the CPI/inflation will be from year 1 to year 2, from year 2 to year 3, from year 3 to year 4. (round to the whole number for all calculations and final answers)
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Suppose Dalia is a sports fan and buys only football tickets. Dalia deposits $4,000 into a savings account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a football ticket has a price of $10.00. Initially, Dalia's $4,000 deposit has a purchasing power of football tickets. For each of the annual inflation rates given in the following table, first determine the new price of a football ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dalla's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest football ticket. For example, if you find that the deposit will cover 20.7 football tickets, you would round the purchasing power down to 20 football…