Question

9. The CPI-U (U.S. city average, all items) has the following annual averages: YEAR INDEX 2006...

9. The CPI-U (U.S. city average, all items) has the following annual averages:

YEAR INDEX

2006 201.600

2007 207.342

2008 215.303

2009 214.537

2010 218.056

a. For each year from 2007 to 2010, determine the annual inflation rate in percent to three decimal places.

b. Since inflation, like interest, is compounded from period to period (e.g., year to year), estimate the overall annual inflation rate per year from 2006 to 2010. Suggestion: Do not simply average the rates of Part a.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) inflation formula = [ ( later CPI - starting CPI ) / starting CPI. ] *100.

2007 = [(207.342 - 201.600) / 201.600]*100

= (5.724 / 201.600)*100

= 2.839

2008 = [(215.303- 207.324) / 207.324]*100

= (7.979 / 207.324)*100

= 3.848

2009 = [(214.537- 215.303) / 215.303]*100

= ( - 0.766 / 215.303)*100

= - 0.355 (deflation) or negative inflation

2010 = [(218.056- 214.537) / 214.537]*100

= (3.519/ 214.537)*100

= 1.614

b) inflation from 2006 to 2010

= [ ( 2010's CPI - 2006's CPI ) / 2006's CPI. ] *100.

[(218.056- 201.600) / 201.600]*100

= (0.08162/ 201.600)*100

= 8.162

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The CPI-U (U.S. city average, all items) has the following annual averages: Year Index 2013 237.3...
The CPI-U (U.S. city average, all items) has the following annual averages: Year Index 2013 237.3 2014 239.6 2015 242.8 2016 243.8 2017 248.4 Part a For each year from 2014 to 2017, determine the annual inflation rate in percent to two decimal places. Year Inflation Rate 2014 enter percentages % 2015 enter percentages % 2016 enter percentages % 2017 enter percentages % Part b Since inflation, like interest, is compounded from period (e.g. year to year), estimate the overall...
Consider the following realized annual returns: Year End Index Realized Return Stock A Realized Return 2006...
Consider the following realized annual returns: Year End Index Realized Return Stock A Realized Return 2006 23.6% 46.3% 2007 24.7% 26.7% 2008 30.5% 86.9% 2009 9.0% 23.1% 2010 -2.0% 0.2% 2011 -17.3% -3.2% 2012 -24.3% -27.0% 2013 32.2% 27.9% 2014 4.4% -5.1% 2015 7.4% -11.3% The average annual return on the Index from 2006 to 2015 is closest to: 8.75% 7.10% 9.75% 4.00%
(number 6) Below is a table found from the Bureau of Labor Statistics. Year CPI (index)...
(number 6) Below is a table found from the Bureau of Labor Statistics. Year CPI (index) Year CPI (index) 2000 172.2 2009 214.5 2001 177.1 2010 218.1 2002 179.9 2011 224.9 2003 184.0 2012 229.6 2004 188.9 2013 233.0 2005 195.3 2014 236.7 2006 201.6 2015 237.0 2007 207.3 2016 240.0 2008 215.3 What is the percent difference between 2015 and 2006? In 2006, my family income was $44,000. In 2016, my family income was $52,000. Using the percent change...
Consider the following year-end prices of a hypothetical market index. (1) Calculate the annual returns of...
Consider the following year-end prices of a hypothetical market index. (1) Calculate the annual returns of the market index, and use the average annual return as the expected return of the market index. (2) Assume the risk-free rate is 0.75%, and use the above market index as the market portfolio. What is the expected return of asset A with a beta of 0.8 using CAPM model? market index 2004 100 2005 110 2006 104.5 2007 106.59 2008 106.59 2009 110.85...
Use the table for the question(s) below. Consider the following realized annual returns: Year End Index...
Use the table for the question(s) below. Consider the following realized annual returns: Year End Index Realized Return Stock A Realized Return 2006 23.6% 46.3% 2007 24.7% 26.7% 2008 30.5% 86.9% 2009 9.0% 23.1% 2010 -2.0% 0.2% 2011 -17.3% -3.2% 2012 -24.3% -27.0% 2013 32.2% 27.9% 2014 4.4% -5.1% 2015 7.4% -11.3% The variance of the returns on the Index from 2006 to 2015 is closest to:
Year Consumer Price Index Percentage Increase 2007 207.3 2008 215.3 2009 214.5 2010 218.1 2011 224.9...
Year Consumer Price Index Percentage Increase 2007 207.3 2008 215.3 2009 214.5 2010 218.1 2011 224.9 2012 229.6 2013 233.0 2014 236.7 2015 237.0 The following table gives the value of the consumer price index for 2007 through 2015. What was the inflation rate in 2008? ________________ What was the inflation rate in 2012 ___________________ What was the percentage increase of the average price level from 2007 to 2015?__________ Inflation was highest in__________ and lowest in __________year
The following table provides data from the United States on the average annual rates of unemployment...
The following table provides data from the United States on the average annual rates of unemployment and inflation. Use the numbers to construct a scatter plot. Discuss why, in the short run, the unemployment rate rises when inflation falls. Year Unemployment rate (%) Inflation rate (%) Is how the chart is laid out 2003 6 2.3    2004 5.5 2.7    2005 5.1 3.4 2006 4.6 3.2    2007 4.6 2.9    2008 5.8 3.8    2009 9.3 -0.4   ...
The following data is provided for a market 500 Index: Year Total return Year Total return...
The following data is provided for a market 500 Index: Year Total return Year Total return 2000 16.0% 2010 2.0% 2001 8.0% 2011 3.0% 2002 -3.0% 2012 3.0% 2003 1.0% 2013 4.0% 2004 5.0% 2014 5.0% 2005 21.0% 2015 4.0% 2006 43.0% 2016 3.0% 2007 4.9% 2017 3.5% 2008 -7.0% 2018 4.5% 2009 0.1% 2019 5.8% Calculate the last 10 -year arithmetic average annual rate of return on the market Index. 3.78% 2.69% 0.37% 3.93%
The following data is provided for a market 500 Index: Year Total return Year Total return...
The following data is provided for a market 500 Index: Year Total return Year Total return 2000 16.0% 2010 2.0% 2001 8.0% 2011 3.0% 2002 -3.0% 2012 3.0% 2003 1.0% 2013 4.0% 2004 5.0% 2014 5.0% 2005 21.0% 2015 4.0% 2006 43.0% 2016 3.0% 2007 4.9% 2017 3.5% 2008 -7.0% 2018 4.5% 2009 0.1% 2019 5.8% Calculate the 20 -year geometric average annual rate of return on the market Index. 5.91% 3.32% 3.77% 0.28%
The following information is from General Electric Corporation annual reports. YearRevenue ($ million)Employees Year Revenue ($...
The following information is from General Electric Corporation annual reports. YearRevenue ($ million)Employees Year Revenue ($ million) Employees (000) 2004 134 298 2005 152 302 2006 157 316 2007 168 323 2008 177 336 2009 183 324 2010 150 297 2011 147 290 2012 147 300 2013 146 308 2014 149 302 2015 151 326 Compute a simple index for the number of employees for GE using the period 2004−06 as the base. (Round your answers to 1 decimal place.)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT