Practical - Additional questions - cpi and gdp deflator PDF

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Additional Questions - CPI and GDP Deflator...

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Additional Questions – CPI & GDP deflator Question 1 In a simple, closed economy, only three goods were produced and consumed. These goods were bought by households only. The following table shows the levels output and prices for these goods in 2000 and 2013. The base year is 2000. 2000 2013 Quantity Price Quantity Price Good 1 100 $1.00 150 $2.00 Good 2 200 $0.35 300 $0.45 Good 3 30 $5.00 60 $9.00 a) Calculate the CPI in 2000 and in 2013. b) Calculate the GDP deflator in 2000 and in 2013. Question 2 In this question, we will include the firms and the government into consideration. In a simple, closed economy, only three goods were produced and consumed. Both Good 1 and Good 2 were purchased by households only while Good 3 was equally split among households, firms and government. The following table shows the levels output and prices for these goods in 2000 and 2013. The base year is 2000. 2000 2013 Quantity Price Quantity Price Good 1 100 $1.00 150 $2.00 Good 2 200 $0.35 300 $0.45 Good 3 30 $5.00 60 $9.00 a) Calculate the CPI in 2000 and in 2013. b) Calculate the GDP deflator in 2000 and in 2013. Question 3 Instead of looking at a closed economy, we will consider what happens to an open economy in this question. A small open economy consumed 3 goods. The following table shows the quantities of goods exchanged and their prices in 2000 and 2013. The economy produced most of the goods itself; however; half of Good 1 was purchased from abroad. Households consumed all of Good 1 and 60% of Good 2. The economy sold the remaining amount of Good 2 to foreigners. The consumption of Good 3 was equally split between the firms and the government. The following table shows the levels output and prices for these goods in 2000 and 2013. The base year is 2000. 2000 2013 Quantity Price Quantity Price Good 1 100 $1.00 150 $2.00 Good 2 200 $0.35 300 $0.45 Good 3 30 $5.00 60 $9.00 a) Calculate the CPI in 2000 and in 2013. b) Calculate the GDP deflator in 2000 and in 2013....