The difference bewteen measuring inflation with the PCE versus with core PCE is PCE measure does...
The difference bewteen measuring inflation with the PCE versus with core PCE is
PCE measure does not include prices of food and energy
PCE measure does not include the prices of new goods
Core PCE includes measures of investment goods and well as consumer goods
Core PCE does not include food and energy prices
Homework Answers
Ans) Core PCE excludes food and energy prices as they are highly volatile in short run. And hence core inflation is considered as the better instrument to gauge price changes.
Option d
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The difference bewteen measuring inflation with the PCE versus
with core PCE is
PCE measure does...
The key difference between the CPI and PCE is that CPI measures prices of only consumption...
The key difference between the CPI and PCE is that CPI measures prices of only consumption goods while PCE included intermediate goods the CPI is released monthly while the PCE is released quarterly the CPI is a fixed basket of goods while the PCE's coverage is not fixed the CPI includes food and energy prices while the PCE does not Core PCE and Core CPI measures of inflation leave out food and energy prices focus on the most important types...
Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purposes....
Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purposes. A sudden rise in food prices O A. makes inflation targeting harder because it is closely related to excess demand in the economy. OB. would be offset by an increase in the Corearian dollar, making this price change irrelevant. OC. is closely related to changes in core inflation, so the central bank uses it for targeting inflation O D. is irrelevant for inflation targeting...
4. The difference between expenditure and income approach to measure GDP resides in: A) Expenditure approach...
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discussion:2 Effects of Unemployment and Inflation This Discussion focuses on how to measure the cost of...
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5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and muffins....
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1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in...
1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in the price of one important commodity such as food. c. persistent increase in the general level of prices as measured by a price index. d. increase in the purchasing power of the dollar. 2. Inflation: a. reduces the cost-of-living of the typical worker. b. is measured by changes in the cost of a typical market basket of goods between time periods. c. causes the...
5. Real Versus homihal GDP Consider a simple economy that produces two goods: apples and muffins....
5. Real Versus homihal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three-year period. Apples Price Quantity (Dollars per apple) (Number of apples) Muffins Quantity (Dollars per muffin) (Number of muffins) Price 125 Year 2018 2019 2020 170 150 200 230 170 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year 2018,...
The Consumer Price Index (CPI) is just one price index that we use to measure inflation....
The Consumer Price Index (CPI) is just one price index that we use to measure inflation. The CPI was 33.4 in 1967 and 160.5 in 1997. Dividing 160.5 by 33.4 yields a factor of 4.8, so if Dr. Evil thought that one million dollars was a lot of money in 1967, an equivalent amount in 1997 would be $4.8 million. Imagine if you were cryogenically frozen in the 1960s and revived 30 years later. Changes in societal behavior, advances in...
Real versus nominal GDP Consider a simple economy that produces two goods: pens and envelopes. The...
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5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins....
5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three- year period. Apples Price Quantity (Dollars per apple) (Number of apples) Year 2018 2019 115 Muffins Price Quantity (Dollars per muffin) (Number of muffins) 175 180 160 150 2020 100 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year...
Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purposes. A sudden rise in food prices O A. makes inflation targeting harder because it is closely related to excess demand in the economy. OB. would be offset by an increase in the Corearian dollar, making this price change irrelevant. OC. is closely related to changes in core inflation, so the central bank uses it for targeting inflation O D. is irrelevant for inflation targeting...
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three-year period. YearPrice (Dollars per pen)Quantity (Number of pens)Price (Dollars per muffin)Quantity (Number of muffins)201811502160201921354230202031104165Use the information from the preceding table to fill in the following table. From 2019 to 2020, nominal GDP _______ , and real GDP _______ .The inflation rate in 2020 was _______ .Why is real GDP a more accurate measure...
1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in the price of one important commodity such as food. c. persistent increase in the general level of prices as measured by a price index. d. increase in the purchasing power of the dollar. 2. Inflation: a. reduces the cost-of-living of the typical worker. b. is measured by changes in the cost of a typical market basket of goods between time periods. c. causes the...
5. Real Versus homihal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three-year period. Apples Price Quantity (Dollars per apple) (Number of apples) Muffins Quantity (Dollars per muffin) (Number of muffins) Price 125 Year 2018 2019 2020 170 150 200 230 170 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year 2018,...
5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three- year period. Apples Price Quantity (Dollars per apple) (Number of apples) Year 2018 2019 115 Muffins Price Quantity (Dollars per muffin) (Number of muffins) 175 180 160 150 2020 100 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year...
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