The average price of gasoline in 2005 was $ 2.31 per gallon. In 1993, the average price was $1.07. The average annual rate of increase in the price of gasoline over this 12-year period is 6.62%. If we assume that the price of gasoline will continue to inflate at this rate, how long will it be before we are paying $6.73 per gallon?
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- The table below lists the prices from last year and the base year for a college-related basket of goods. Assume that the typical basket of goods for a college student consists of 190 gallons of gas, 65 pizzas, 50 6-packs, and 4 textbooks. Basket of College-Related Goods Basket of Goods Gasoline (per gallon) Pizza (per pizza) Beer (per 6-pack)> Textbook (per book) Price Base Year (dollars) $ 1.50 3.90 4.00 96.00 Price Last Year (dollars) $ 1.90 7.75 6.76 225.00 Instructions: Round your answers to two decimal places. a. Using the values above, what is the rate of inflation between the base year and last year? % b. Assume that rather than buying textbooks for their courses last year, all students decided to buy online access cards at $105 per textbook. What is the rate of inflation between the base year and last year now? %Shea is pricing materials (wood, wire, pipe, etc.) for new home construction on a “per unit” basis. Inflation on materials has been running at 16.0% for the past 3 years and is expected to remain at that rate for the next 10 years. The actual dollars paid for expenses at the end of year 3 for a “unit” are $55,000. Solve, a. What did the same set of materials cost 3 years ago? b. If the trend continues, what will they cost 10 years from now?Define conversion to constant dollars
- : If inflation is 2.7% each year from 2021 to 2031, what is the purchasing power in 2021 dollars of $100,000 in 2031?Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $10.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual Inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa'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 movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Rosa will not buy…The table below lists the prices from last year and the base year for a college-related basket of goods. Assume that the typical basket of goods for a college student consists of 190 gallons of gas, 65 pizzas, 50 6-packs, and 5 textbooks. Basket of College-Related Goods Basket of Goods Gasoline (per gallon) % Price Base Year (dollars) $ 2.80 6.00 4.50 112.00 Pizza (per pizza) Beer (per 6-pack) Textbook (per book) Instructions: Round your answers to 2 decimal places. a. Using the values above, what is the rate of inflation between the base year and last year? % Price Last Year (dollars) $ 3.10 9.15 7.42 239.00 b. Assume that rather than buying textbooks for their courses last year, all students decided to buy online access cards at $105 per textbook. What is the rate of inflation between the base year and last year now?
- Suppose Neha is a cinephile and buys only movie tickets. Neha deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Neha's $3,000 deposit is movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Neha'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 movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Neha will not buy…Jack received a $4,000 raise this year; this increased his salary as an associate television producer from $35,500 to $39,500. What percentage increase in nominal income did Jack receive? 14.6 percent 11.3 percent 10.1 percent 8.2 percentSuppose Ginny is an avid reader and buys only comic books. Ginny deposits $3.000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a comic book is priced at $15.00. Initially, the purchasing power of Ginny's $3,000 deposit is comic books. For each of the annual inflation rates given in the following table, first determine the new price of a comic book, assuming it rises at the rate of inflation. Then enter the corresponding ourchasing power of Cinny's deposit ater one vear 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 comic book. For example, if you find that the deposit will cover 20.7 comic books, yor would round the purchasing power down to 20 comic books under the assumption that Ginny will not buy…
- Suppose Devon is a fashionista and buys only denim jackets. Devon 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 denim jacket has a price of $10.00. Initially, Devon's $4,000 deposit has a purchasing power of 400 denim jackets. For each of the annual inflation rates given in the following table, first determine the new price of a denim jacket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Devon'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 denim jacket. For example, if you find that the deposit will cover 20.7 denim jackets, you would round the purchasing power down to 20 denim jackets under the…Calculate the total money created in an economy if the fresh deposits with the bank is $25000 and the LRR is 30%Year | price of meat (per Kg) price of bread (per Kg) price of gas (per lt) housing price (monthly rent of 1 bd unit) $10 $20 S1.5 S1000 $12 S18 S1.5 $1200 Suppose a consumer basket consists of 40 Kg meat, 50 Kg bread, 400 It gas, and a one bedroom apartment for one year. Using the table above, compute the inflation rate in this economy based on CPI between years 1 and 2. 10% 12% 6% 17%