# hw2.doc - Name last 4 PSU ID HOMEWORK#1(40 points total...

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Name ___________________________________________ last 4 PSU ID ___________ HOMEWORK #1 (40 points total) Economics 351 online 1) (303 points total - 5 points for each part) Using the following link to obtain CPI data ( ), find the value of the CPI in May of 1958 and answer the following questions: a) If the CPI basket in the base period cost \$3,000, consistent with the example in the lectures, what would that same basket cost in May of 1958? b) If people was making \$30,000 in the base period, how much would they have to make during May of 1928 to have the same purchasing power as \$40,000 has in the base period? c) Calculate the rate of inflation between May of 1958 and May of 1959 (show work). d) Using the data on one year interest rates ( ), calculate the ex-post real rate of interest between May of 1958 and May of 1959. e) Calculate the ex-post real rate of interest from January 2012 to January 2013.
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