Question

1.

Good	Price in 2015	Price in 2016
A	$2.10	$2.25
B	$5.10	$5.80
C	$3.05	$2.90

Consider the prices of three goods as given in the table above. Who is likely to feel like the inflation rate is higher?

Group of answer choices

Someone who buys 10 units of A, 10 units of B, and 5 units of C

Someone who buys 2 units of A, 1 unit of B, and 2 units of C

Someone who buys 10 units of A, 5 units of B, and 10 units of C

Someone who buys only good C

2.

Three goods are produced and consumed in an economy during years 1 and 2. The table shows prices (P1 and P2) for each good and the quantities produced (Q1 and Q2) for each good. The base year is year 1.

Good	P1	Q1	P2	Q2
Milk (gallons)	$4.10	40	$4.20	50
Beef (pounds)	$1.90	20	$2.20	25
Carrots (bags)	$4.50	10	$4.80	15

Enter numbers rounded to two decimal places in each blank.

Real GDP in year 1 is $  .

Real GDP in year 2 is $  .

Answer 1

.answer is C

1
option A
good	price 2015	Q	price 2016	Q	RGDP2016	NGDP2016
A	2.1	10	2.25	10	21	22.5
B	5.1	10	5.8	10	51	58
C	3.05	5	2.9	5	15.25	14.5
					87.25	95
	inflation rate=Nominal gdp/ real gdp *100		108.8825
option B
good	price 2015	Q	price 2016	Q	RGDP2016	NGDP2016
A	2.1	2	2.25	2	4.2	4.5
B	5.1	1	5.8	1	5.1	5.8
C	3.05	2	2.9	1	3.05	2.9
					12.35	13.2
		inflation rate				106.8826
option C
good	price 2015	Q	price 2016	Q	RGDP2016	NGDP2016
A	2.1	10	2.25	10	21	22.5
B	5.1	5	5.8	5	25.5	29
C	3.05	10	2.9	1	3.05	2.9
					49.55	54.4
		inflation rate				109.7881
2
good	P1	Q1	P2	Q2	Real gdp Y1=p1*q1	Real gdp Y2=P1*Q2
milk	4.1	40	4.2	50	164	205
beef	1.9	20	2.2	25	38	47.5
carrots	4.5	10	4.8	15	45	67.5
					247	320