Looking at the trend graph above which year would the economy most likely be experiencing high unemployment?
| Nominal GDP 2015 | Real GDP 2015 | Nominal GDP 2016 | Real GDP 2016 |
| 25 | 25 | 40 | 39 |
The inflation rate between 2014 and 2015 was 4%. The price level change or inflation rate between 2015 and 2016 would be (inflation/deflation/hyperinflation/stagflation/superinflation/disinflation)
| Year | Nominal GDP | Real GDP | GDP Deflator |
| 2009 | ________ | $500 | 100 |
| 2010 | $551.2 | ________ | 106 |
| 2011 | $600.6 | $546 | ________ |
| 2012 | ________ | $600.6 | 120 |
The inflation rate between 2009 and 2010 is ____________ percent. Round to the nearest decimal. Do not write the word percent or you will lose .01 points.
What was the inflation rate between 2010 and 2011? Round to the nearest decimal.
To calculate inflation you first determine the two periods that are being compared. DO NOT go back to base year or any other period if the problem does not say that.
The inflation rate is a % change. See Study guide for all formulas.
| Year | CPI |
| 1999 | 80 |
| 2000 | 87 |
| 2001 | 105 |
| 2002 | 112 |
| 2003 | 108 |
| 2004 | 117 |
The rate of inflation in 2001 is __________ percent.
inflation is measured using the Consumer Price Index, the PPI or the GDP Deflator/Index. To get a price change rate you use the formula for a % change.
Use the previous year for the old inflation unless the problem says otherwise. Do not go back to base year unless problem says to do so.
105-87/87=
| Good | 2015 Price Base Year | 2015 Quantity Base Year | 2016 Price | 2016 Quantity |
| Golf balls | $2 | 250 | $3 | 200 |
| Footballs | $3 | 300 | $2 | 400 |
| Baseballs | $4 | 400 | $5 | 500 |
The inflation rate between the 2015 & 2016 __________ percent. (do NOT include the % sign in your answer or you will not get credit)
You bought a home in 2012 and sold it in 2017 for a profit of $35,000. Your real estate agent made a commission of $2,000. This transaction contributed ________ to gross domestic product (GDP).
GDP includes goods and services in one period only. The value of the house was captured as part of Investment in GDP the year the house was built. Therefore, the only service that was completed this year was the agent selling the home.
You have been asked to help the mayor analyze survey results. 70 have full time jobs, and 20 are working part time. 12 people are not working and are interviewing daily and 17 people are students who are not looking for a job and 5 people were looking but have finally given up. Based on this how many people are not in the labor force? ____________.
Not in the labor force can mean several things. These are the working age population that are not working & are NOT looking for a job.
Carla made bought a car in 1946 for $2000, if the CPI was 18.3 in 1946 and 202.4 in 2011, then the inflation adjusted price of the care would be $_________
This is a conversion problem; like converting inches to feet or pesos to dollars.
2000*(202.4/18.3)=22,120.
| Good | 2012 Price Base Year | 2012 Quantity Base Year | 2013 Price | 2013 Quantity |
| A | $2.00 | 500 | $2.50 | 600 |
| B | $4.00 | 1,000 | $5.00 | 900 |
| C | $2.00 | 200 | $1.00 | 300 |
What was the real GDP in 2013 using 2012 as the base year?
Sum of current production * base year prices
600 units *2=1200
900*4=3600
300*2=600
In a healthy economy, the unemployment rate is
You can measure inflation using CPI, PPI and GDP deflator. Here you are given the nominal and real values for 2 years.
To calculate GDP deflator = Nominal/Real GDP
2015 Index =100
2016 Index =102.5 rounded up to 103
Then you must calculate the inflation rate which is the percentage change in the index.
103=100/100=3%. Given 3% is a positive number it is not deflation. But this is a special type of inflation because the percentage change is decreaseing….instead this would be disinflation because it is positive but not as high as the previous year.