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# I must show my work and explain the answers in economic terms. 1) Suppose nominal GDP in 2005 was \$14 trillion and in 2006 it was \$15 trillion.

I must show my work and explain the answers in economic terms.
1) Suppose nominal GDP in 2005 was \$14 trillion and in 2006 it was \$15 trillion. The general price index in 2005 was 100 and in 2006 it was 103. Between 2005 and 2006 real GDP rose by what percent?
2) The consumer price index was 198.3 in January of 2006, and it was 202.4 in January 2007. Therefore, the rate of inflation in 2006 was about;
3)A. a Mexican peso depreciates in value relative to the US dollar, what happens to the price of US goods in Mexico? What happens to the price of Mexican goods in the US?
B. Why would a country ( for example China)  choose to keep their currency relatively pegged to the US dollar? If the US dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the US?
4) Suppose the Canadian dollar (C\$) price of one British pound is C\$2. A hotel room in London costs 120 pounds, while a similar hotel room in Toronto costs C\$250. In which city is the hotel room cheaper, and by how much?
5) Answer the next question on the basis of the following production possibilities data for Landia and Scandia.
Landia production possibilities:

A b c d e
Fish 8 6 4 2 0
Chips 0 20 40 60 80
Scandia production possibilities
A b c d e
Fish 8 6 4 2 0
Chips 0 12 24 36 48
Using the data above. What would be feasible terms of trade between Landia and Scandia?

I must show my work and explain the answers in economic terms.
1) Suppose nominal GDP in 2005 was \$14 trillion and in 2006 it was \$15
trillion. The general price index in 2005 was 100 and in 2006 it was
103. Between 2005 and 2006 real GDP rose by what percent?
2) The consumer price index was 198.3 in January of 2006, and it was
202.4 in January 2007. Therefore, the rate of inflation in 2006 was
3)A. a Mexican peso depreciates in value relative to the US dollar, what
happens to the price of US goods in Mexico? What happens to the price of
Mexican goods in the US?
B. Why would a country ( for example China) choose to keep their
currency relatively pegged to the US dollar? If the US dollar were to
appreciate considerably against most currencies, what would be the
effect on Chinese exports to countries other than the US?
4) Suppose the Canadian dollar (C\$) price of one British pound is C\$2. A
hotel room in London costs 120 pounds, while a similar hotel room in
Toronto costs C\$250. In which city is the hotel room cheaper, and by how
much?
5) Answer the next question on the basis of the following production
possibilities data for Landia and Scandia.
Landia production possibilities:
A b c d e
Fish 8 6 4 2 0
Chips 0 20 40 60 80
Scandia production possibilities
A b c d e
Fish 8 6 4 2 0
Chips 0 12 24 36 48
Using the data above. What would be feasible terms of trade between
Landia and Scandia?

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