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Question 1

Suppose that the nominal interest rate in China is 7.6%. In addition, the inflation rate is equal to 5.3%.

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

%

 

Hint






Question 2

Suppose that the price of Oranges in 1980 is $0.4 and in 2002 it is $1.7. In addition, you also know that the CPI in 1980 is 160 and in 2002 it is 210.

Given this information, what is the real value of Oranges in 1980?

 

Hint




Question 3

Suppose that the price of Avocados in 1978 is $1.2 and in 2001 it is $2.6. In addition, you also know that the CPI in 1978 is 210 and in 2001 it is 230.

Given this information, what is the real value of Avocados in 2001?

 

Hint




Question 4

Suppose that the price of Apples in 1956 is $0.6 and in 2016 it is $0.6. In addition, you also know that the CPI in 1956 is 180 and in 2016 it is 150.

Given this information, what is the change in the real value of Apples between 1956 and 2016.

%

 

Hint


Question 5

Suppose that a typical doctor earned 39000 in 1965. In addition, you know that in 2009 a typical doctor earns 87000. Finally, you also know that the CPI in 1965 is 200 and in 2009 is 230.

Given this information, doctor's 1965 salary in 2009 dollars is:

$

 

Hint


Question 6

Suppose that a typical professor earned 48000 in 1972. In addition, you know that in 2003 a typical professor earns 98000. Finally, you also know that the CPI in 1972 is 80 and in 2003 is 270.

Given this information, professor's 2003 salary in 1972 dollars is:

$

 

Hint




Question 7

Suppose that a typical nurse earned 28000 in 1965. In addition, you know that in 1981 a typical nurse earns 71000. Finally, you also know that CPI in 1965 is 210 and in 1981 is 240.

Given this information, the salary of a typical nurse in 1981 relative to 1965 is:

 

Hint




Question 8

The price index was 150 in one year and 270 in the next.

What is the inflation rate?

%

 

Hint