!! Consider an economy that only produces and consumes computers and dresses. Th

Question

!! Consider an economy that only produces and consumes computers and dresses. The table provides information about prices and quantities for two years

a. Compute CPI.

b. Assume there is no investment and no government expenditure. What are the Net Exprts (in nominal terms) of this economy in the years 2010 and 2014?

I know Net Exports= Exports - Imports.

Please solve and explain this question!

2010 2014 Price of a computers $1000 $1200 Price of a dress $10 $20 Number of computers produced 100 150 Number of dresses produced 50000 30000 Domestic consumtion of computers 110 130 Domestic consumption of dresses 45000 40000

Explanation / Answer

CPI = (130*1200+20*40000)/(110*1000+45000*10)

in year 2010 Number of computers imported= 10

Number of dresses exported 5000

in the year 2014 Number of computers exported=20

Number of dresses imported = 10000

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