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Question 1

Suppose that the nominal interest rate in the US is 2.8%. In addition, the inflation rate is equal to 8.8%.

Given this information, what is the real interest rate in the US?

%

 

Hint






Question 2

Suppose that the price of Avocados in 1954 is $0.9 and in 1982 it is $2.4. In addition, you also know that the CPI in 1954 is 240 and in 1982 it is 200.

Given this information, what is the real value of Avocados in 1954?

 

Hint




Question 3

Suppose that the price of Avocados in 1961 is $0.9 and in 1988 it is $2.6. In addition, you also know that the CPI in 1961 is 230 and in 1988 it is 240.

Given this information, what is the real value of Avocados in 1988?

 

Hint




Question 4

Suppose that the price of Pineapples in 1976 is $0.7 and in 2016 it is $1. In addition, you also know that the CPI in 1976 is 120 and in 2016 it is 160.

Given this information, what is the change in the real value of Pineapples between 1976 and 2016.

%

 

Hint


Question 5

Suppose that a typical professor earned 22000 in 1962. In addition, you know that in 2001 a typical professor earns 54000. Finally, you also know that the CPI in 1962 is 110 and in 2001 is 240.

Given this information, professor's 1962 salary in 2001 dollars is:

$

 

Hint


Question 6

Suppose that a typical professor earned 24000 in 1961. In addition, you know that in 2014 a typical professor earns 78000. Finally, you also know that the CPI in 1961 is 120 and in 2014 is 220.

Given this information, professor's 2014 salary in 1961 dollars is:

$

 

Hint




Question 7

Suppose that a typical professor earned 34000 in 1979. In addition, you know that in 2011 a typical professor earns 52000. Finally, you also know that CPI in 1979 is 160 and in 2011 is 250.

Given this information, the salary of a typical professor in 2011 relative to 1979 is:

 

Hint




Question 8

The price index was 100 in one year and 230 in the next.

What is the inflation rate?

%

 

Hint