True or False: A BMW car costs $40,000 this year, but only $8,000 in 1980. It’s more expensive today than in 1980 to buy a BMW.” (Suppose PCE price index is 30 and 120 in 1980 and 2023, respectively.)
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True or False: A BMW car costs $40,000 this year, but only $8,000 in 1980. It’s more expensive today than
in 1980 to buy a BMW.” (Suppose PCE
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- ← Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of $1,905 in 1989 and that the CPI index was 116 in 1989. If the CPI index was 223 in 2009, then the cost of tuition in 2009, as the result of inflation, would equal $ Suppose that the actual average cost of tuition in 2009 was $7,058. Relative to the expected cost computed above, the cost of tuition increased by (Enter your response rounded to the nearest whole number.) the amount of inflation.Economics Prepare a composite (weighted) index for housing construction costs in 2008, using the following data. Reference Year (/=100), S/? Туре of Housing Single units Duplex units Multiple Percent 2008, S/n? 67 49 65 44 63 25 36 56 The composite (weighted) index for housing construction costs in 2008 is...6 / 10 125% 1) The table below gives the price and consumption (usage/sales) for two products x and y for four years. Using year 2000 as the base year calculate for each year, the b) Laspeyers price index, and Quantity x, qx a) Basic expenditure index Price of c) Paasche price index Quantity y, q, Year Price of y, Py x, Px 2000 R4 R3 3 2001 R5 6 R4 6. 2002 R6 4 R5 4 2003 R6 4 R7 4 2) Below is a table of items consumed in a hotel for three years together with the average price of each item for each of the three years. Using 2003 as the base year, calculate for each subsequent year, the a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index d) Laspeyers volume index e) Paasche volume index
- 7 / 10 116% 2) Below is a table of items consumed in a hotel for three years together with the average price of each item for each of the three years. Using 2003 as the base year, calculate for each subsequent year, the a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index d) Laspeyers volume index e) Paasche volume index Item 2003 2004 2005 Quantity | Price (R) Quantity 3100 Price (R) Price (R) Quantity Milk 2920 3.95 4.10 3210 4.10 2230 17563 Bread 2190 3.60 3.80 2200 4.00 Eggs (each) 16425 0.60 0.60 17890 0.65 Butter 730 7.20 680 7.70 650 8.30 Cheese 1135 14.00 1086 14.9 1150 16.00 Margerine 1574 6.80 1700 7.20 1720 7.50nflation causes things to cost more, and for our money to buy less (hence your grandparents saying "In my day, you could buy a cup of coffee for a nickel"). Suppose inflation decreases the value of money by 5% each year. In other words, if you have $1 this year, next year it will only buy you $0.95 worth of stuff. How much will $100 buy you in 20 years?$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 $105 per textbook. What is the rate of inflation between the base year and last year now? %
- If the MPC -0.85, what is the value of the MPS? Provide an answer which is accurate to two places to the right of the decimal point.3. The variable rdintens is the expenditure on research and development (R&D) as a percentage of sales. Salary is measured in millions of dollars. The variable profmarg is profit as a percentage of sales. Let's suppose the equation below is estimated. Which statement is true? rdintens = 472 + .321log(sales) + .050profmarg (1.369) (216) (.046) o profmarg has a statistically significant effect on rdintens at 5% level o profmarg has a statistically significant effect on rdintens at 10% level o profmarg has a statistically insignificant effect on rdintens o profmarg has a statistically significant effect on rdintens at 1% levelGiven the following data of monthly salary of an employee : (i) Calculate the real monthly income for each year. (ii) In which year did the employee have the highest purchasing power? (iii) How much salary should he have earned in each of the years to give him the same purchasing power as in the year of his highest real income? year Monthly Salary ($) |Price Index (1997 = 100) 15,000 15,500 16,000 16,500 17,000 %3D 2000 2001 115 120 2002 130 2003 138 2004 144 2005 18,000 150
- Suppose that you are considering whether to enroll in a summer computer-training program that costs $3,600. If you take the program, you will have to give up $1,800 of earnings from your summer job. You figure that the program will increase your earnings by $600 per year for each of the next 10 years. Beyond that, it is not expected to affect your earnings. Suppose the interest rate is 10% Use the preceding information to calculate the present value of the wage increase resulting from the training program. Then decide whether the investment is worthwhile, given the present value of the cost of the training program. At this interest rate, the present value of the increase in wages is about the training. Thus, from a strictly monetary viewpoint, you than the present value of the total cost of , which is participate in the training program.What would be the value of income if consumption is $600 and APC is 0.77Last year, at Haven's Pond Car Dealership, for a particular model of BMW, Jeep, and Toyota, one could purchase all three cars for a total of $140,000. This year, due to inflation, the same cars would cost $151,830. The cost of the BMW increased by 8%, the Jeep by 5%, and the Toyota by 12%. If the price of last year's Jeep was $7,000 less than the price of last year's BMW, what was the price of each of the three cars last year?