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macro mid term - CPI for the base year is always 1 ← 12 D...

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macro mid term 08/10/2007 11:05:00 1) A because real income = nominal income/ CPI suppose 100/2 = 50, but the CPI is the exteragation because 100/1 = 100 2) C inflation fall, lenders benefits, if inflation rise, borrower benefits 3) A 4) B 5) B deposite = 1000 1000(1+5/100)^20 = 2653.30 6) D 7) B 8) E movement along a demand curve = quantity demand. 9) C 10) B 11) B
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Unformatted text preview: CPI for the base year is always 1 ← 12) D ← (10x30 = 300) + (25x3) = 375 ← CPI 2000 = 375/ 300 = 1.25 ← 13) B ← rate of inflation = (1.51 – 1.45 / 1.45) x 100 = 4.1% ← 14) C ← nominal income/CPI = real household income ← 1995 = 35000/ 1 = 35000 ← 2000 = 38500/1.1 = 35000 ← stay the same ← ← 08/10/2007 11:05:00 ← 08/10/2007 11:05:00 ←...
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