2012 information Month: June Purchasing Power of the Dollar: .4374 Price Level (
ID: 1199257 • Letter: 2
Question
2012 information
Month: June Purchasing Power of the Dollar: .4374 Price Level (CPI): 228.618 Inflation:+.04
Month: July Purchasing Power of the Dollar: .4372 Price Level (CPI): 228.723 Inflation:+.05
Month: August Purchasing Power of the Dollar: .4345 Price Level (CPI): 230.102 Inflation:+.06
Month:Sept Purchasing Power of the Dollar: X Price Level (CPI): Y Inflation: Z
1. On August 1, 2012 Emily loaned Billy $1,000. Emily imposed an interest rate of 1 percent on the loan, payable on August 30. Billy repaid all of the loan principal and interest on time. During the month, Emily decided that she wanted to buy a new Sony Handycam HD Camcorder once Billy repaid the loan. On August 31, Emily went to BestBuy to purchase the camcorder. If the price of the camcorder on August 1 was $1,000 and it followed the data in the table, did Emily have enough money to purchase the Sony Handycam?
No. The Sony Handycam cost $1,060 on August 31, but Emily only had $1,010 from the principal and interest paid by Billy.
No. The Sony Handycam cost $1,600 on August 31, but Emily only had $1,060 from the principal and interest paid by Billy.
Yes. The Sony Handycam cost $1,006 on August 31 and Emily had $1,010 from the principal and interest paid by Billy.
D. Yes. The Sony Handycam cost $1,000 on August 31 and Emily had $1,000 from the principal paid by Billy.
2.
In September 2012, the Federal Reserve expanded the money supply by implementing a new bond-buying program, called “Quantitative Easing 3” (QE3). Because of QE3, which of the answer choices could most likely be the values for the purchasing power of the dollar, price level, and inflation, X, Y, and Z, respectively, for September 2012?
X: 0.4339; Y: 230.468; Z: greater than 0.6%
X: 0.4327; Y: 229.987; Z: greater than 0.6%
X: 0.4352; Y: 230.184; Z: less than 0.6%
X: 0.4355; Y: 229.621; Z: less than 0.6%
3.
Macroeconomists are asked routinely to make predictions about real GDP, inflation, and unemployment. They often use two important concepts: the sacrifice ratioand the Phillips curve. The sacrifice ratio is defined as the number of percentage points annual real GDP decreases for each percentage point decrease in inflation. The Phillips curve describes the negative relationship between inflation and unemployment. In 2011, China’s annual real GDP increased by 9 percent, its inflation was 5 percent, and its unemployment rate was 4 percent. China’s central bank, the Bank of China, has set a target inflation for 2012 of 3 percent. Suppose that China’s sacrifice ratio is 2. Using this information, which of the answer choices could most likely be China’s real GDP and unemployment for 2012?
Real GDP: 4%; unemployment: 3%
Real GDP: 5%; unemployment: 3%
Real GDP: 4%; unemployment: 5%
Real GDP: 5%; unemployment: 5%
A.No. The Sony Handycam cost $1,060 on August 31, but Emily only had $1,010 from the principal and interest paid by Billy.
B.No. The Sony Handycam cost $1,600 on August 31, but Emily only had $1,060 from the principal and interest paid by Billy.
C.Yes. The Sony Handycam cost $1,006 on August 31 and Emily had $1,010 from the principal and interest paid by Billy.
D. Yes. The Sony Handycam cost $1,000 on August 31 and Emily had $1,000 from the principal paid by Billy.
2.
In September 2012, the Federal Reserve expanded the money supply by implementing a new bond-buying program, called “Quantitative Easing 3” (QE3). Because of QE3, which of the answer choices could most likely be the values for the purchasing power of the dollar, price level, and inflation, X, Y, and Z, respectively, for September 2012?
A.X: 0.4339; Y: 230.468; Z: greater than 0.6%
B.X: 0.4327; Y: 229.987; Z: greater than 0.6%
C.X: 0.4352; Y: 230.184; Z: less than 0.6%
D.X: 0.4355; Y: 229.621; Z: less than 0.6%
3.
Macroeconomists are asked routinely to make predictions about real GDP, inflation, and unemployment. They often use two important concepts: the sacrifice ratioand the Phillips curve. The sacrifice ratio is defined as the number of percentage points annual real GDP decreases for each percentage point decrease in inflation. The Phillips curve describes the negative relationship between inflation and unemployment. In 2011, China’s annual real GDP increased by 9 percent, its inflation was 5 percent, and its unemployment rate was 4 percent. China’s central bank, the Bank of China, has set a target inflation for 2012 of 3 percent. Suppose that China’s sacrifice ratio is 2. Using this information, which of the answer choices could most likely be China’s real GDP and unemployment for 2012?
A.Real GDP: 4%; unemployment: 3%
B.Real GDP: 5%; unemployment: 3%
C.Real GDP: 4%; unemployment: 5%
D.Real GDP: 5%; unemployment: 5%
Explanation / Answer
Solution :
1) The correct option is D :
The money Emily has on August 31st = $ 1000 X 0.01 + $ 1000 = $ 1010
3) The correct option is D
Inflation and unemployment rate share an inverse relationship . A lesser inflation target results in a higher unemployment rate i.e 5% .
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