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Question 213 ptsNow update the base year to 2013. The rate of inflation between 2012 and 2013 is now _____%. NOTE: calculate the rate of inflation using price indexes.13.3812.8389.06113.3812.28Flag this QuestionQuestion 223 ptsWhich rate of inflation accounts for the substitution bias?Flag this QuestionQuestion 233 pts
The ‘Chain Weighted’ rate of inflation is ___%.Flag this QuestionQuestion 243 ptsUse the table below to answer questions 24 - 27Nominal InterestRatePrice index(CPI)ExpectedInflationJune 1,20082.42217.4635.1June 1,2009214.791Notes:-June 2009 is the last month of the Great recession - the official recovery, began in July of 2009 -expected inflation data is one year hence, so expectedinflation for the period from June 1, 2008 to June 1, 2009 is given in June 2008. So the data in the table indicates that in June of 2008, inflation was expected to be 5.1% over the next 12 monthsUse the provided CPI data to calculate the actual inflation rate that occurred between June 2008 and June 2009 (hint: just calculate the % change in the CPI).Flag this QuestionQuestion 253 ptsThe ex-ante real rate of interest between June 2008 and June 2009 is:-1.23%3.65%1.19%-2.68%Flag this Question
Question 263 ptsThe ex-post real rate of interest between June 2008 and June 2009 is:Flag this QuestionQuestion 273 ptsWe know that most decisions are in part, based on expectations of the future. Suppose we have two people who are trying to decide whether to consume today (assume it is currently June 2008) or save for the future and consume one year later, in June 2009. One person, let's call him Joe, is basing his decision on the ex-ante real rate of interest like most of us do. Theother person who has a crystal ball, we'll call her Crystal, can see exactly what the actual rate of inflation is going to be and thus, has perfect foresightand bases her decision on the ex-post real rate. Look at the difference in the ex-ante and ex-post real rates you calculated in #25 and #26 above. Who would be more likely to save and who would be more likely to spend?Flag this Question