How long would it take for the price level to double if inflation persisted at the following percentages? 17.5 percent per year 35 percent per year 3.5 percent per year
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How long would it take for the price level to double if inflation persisted at the following percentages?
17.5 percent per year
35 percent per year
3.5 percent per year
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- How long would it take for the price level to double if inflation persisted at: (a) 2 percent per year, (b) 5 percent per year, (c) 10 percent per year?If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? What is the “rule of 70”? How long would it take for the price level to double if inflation persisted at (a) 2, (b) 5, and (c) 10 percent per year?Abhijit deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Abhijit withdraws his $105. If inflation was 7 percent during the year the money was deposited, then Abhijit’s purchasing power has increased by 2 percent. Select one: True False
- If the price level increased from 120 to 142, then what was the inflation rate? 1.2 percent 0.8 percent 18.3 percent 22.0 percentAssume the expected rate of inflation is 3 percent per year. What nominal interest rate should you charge to receive a real interest rate of 2 percent per year?How can we determine the economic loss (or gain) in present worth caused by inflation?
- Suppose you borrow $100 from a bank at 5 percent interest for 1 year and the inflation rate that year is 10 percent. Was this loan advantageous to you or the bank?The "Rule of 72" is a reliable guide to the impact of inflation. It is based on dividing 72 by the annual inflation rate to find out the number of years it will take the price of something to double. For example, if you bought an antique chair for $100, and the annual inflation rate is 5 percent, how long would it take for the chair to be worth $200? Using the Rule of 72, divide 72 by 5 and get 14.4. It would take about 14 years for the chair's worth to double. 1. Calculate the values below using the Rule of 72. a. If you bought a house for $150,000 and the annual inflation rate was 4 percent, how long would it take before the house, under good maintenance, would be worth $300,000? b. If you bought a Picasso painting at last week's auction for $200,000 and the annual inflation rate is 10 percent, how long would it take to double your money? c. If you went to the car show and bought a 1965 Mustang in mint condition for $25,000 and the annual inflation rate was 8 percent, when would your…The "Rule of 72" is a reliable guide to the impact of inflation. It is based on dividing 72 by the annual inflation rate to find out the number of years it will take the price of something to double. For example, if you bought an antique chair for $100, and the annual inflation rate is 5 percent, how long would it take for the chair to be worth $200? Using the Rule of 72, divide 72 by 5 and get 14.4. It would take about 14 years for the chair's worth to double. 1. Calculate the values below using the Rule of 72. d. If your grandmother gave you her wedding ring, it was appraised at $1,200, and the annual inflation rate was 6 percent, how many years would it be before it was worth $2,400? e. If you bought an antique lamp for $3,000 and the inflation rate was 3 percent, how many years would it be before your investment doubled in value?
- A. Find the real value of your 40,000 salary for each of the next three year's. year1? year2? year3? b. If you have a cola in your contract, and the inflation rate is 5 percent, what is the real value of your salary for each year? year1? year2? year3?A man deposited his first paycheck of $2000 into a long-term savings account at a bank at an interest rate of 12% in 1951 as a gift to his future grandchild. Assume a steady inflation rate of 8%. If his grandchild withdraws that money today in 2021, how much actual money did they withdraw? How much purchasing power would this withdrawal have in 1951?How can we calculate the average inflation rate?