ECS2603 Assignment 4 Semester 2 2023 (Solutions/answers)
questions:
Question 1
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Which of the following statements with regards to inflation are correct?
Inflation is defined as a sustained increase in the general price level. This...
Question text
Which of the following statements with regards to inflation are correct?
Inflation is defined as a sustained increase in the general price level. This implies that for inflation to occur, it is
sufficient for only the price of oil to increase.
Inflation is a sustained increase in the general price level. This means that there is an overall increase in the prices of
most goods and services.
Inflation is a sustained increase in the general price level. This implies that for inflation to occur, all prices must
increase.
To measure inflation, a yardstick is needed of the general price level and an appropriate period for measuring
changes in the yardstick.
Question 2
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Year Price of lamb Index value
per kg (2012 = 100)
2010 120
2011 122
2012 126
2013 123
2014 124
What is the index value (one decimal point) for 2013?
97.6
Answer:
Question 3
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Complete the following table (one decimal point) and answer the questions:
Index
Price of value
Year lamb per
kg (2012 =
100)
, 2010 118
2011 122
2012 126
2013 124
2014 130
An index number is the ratio of the value of a variable or group of variables at a given time or during a specified
period to its value at a base time or during a base period.
True
False
The frequency of the index numbers is yearly.
True
False
The index is an example of a specific index.
True
False
The index value (one decimal point) for 2014 is
103.2
Answer
In the year that the index value was the highest the price of lamb per kg was the highest.
True
False
The biggest percentage increase in the price of lamb was in
3.28
Answer
Question 4
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Deflation is a decrease in the general price level of goods and services
True
False
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Question 5
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The CPI is an index of prices of all consumer goods and services.
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