Question

The information in the table identifies the quantities of three goods produced in a simple economy in 2018 and 2019, and the prices that the goods sold for in each of the two years. The base year is 2018. Item Quantity Price Price Quantity 2018 2018 2019 2019 2 $10 $11.86 14 Movie tickets 2 $3 $3.78 16 Bags of popcorn 16 $1 $ 1.69 16 Drinks of soda Based on the GDP deflator method, what was the rate of inflation between the two years? Round your answer to two decimal places. Do not enter a percent sign. Dailama Masa

Answer 1

Άιστήμια Sol Item Qty Price 2018 Price Qty 2018 2019 2019 Movie 2 10 Ticket 11.86 4 2 Bags of Poprom 3 3-78 6 - Drinks Soda of 1.69 Real GDP 2018 = E(Price 2018 { (Price 2018 X Qty 2018 12 x ) + (2x2)+(6KD] Real GDP 2018 32 Nominal GDP 2018 - El Price 2018 X Qty 2018) = 32 Real GD/2019 = {(Price 2018 X Qty 2018) {(1084) +(3x6) +(x6)] = $40+18+6 = 64 Nonu'nal GDP 2019 = E(Price 2019. XQty.2019) {(11.8684) +(3.78 %6) 7 (1069 X6) 3 247-44 +22-68 +10-143=80-26 DI

- Nominal GDP 2018 deflator 2018 Odour Real GDP 2018 32 x 100 walio x 100 32 FO O tree Nominal GDP2019. GDP deflator Real GDP 2019 2019 = x100 80.26 x100 64 bit bat iqz 125041 odore Inflation Rate (SDP def 2013 – GDP d2015 X100 between 2018 & 2019 GDP defzo 2018 X 100 (125 250414 125.41 – 100 100

Inflation rate is 25.41%