Question 3. GDP, Inflation Rate, and Unemployment Rate (17 points) The country of Caspir produces only cereal and milk,

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Question 3 Gdp Inflation Rate And Unemployment Rate 17 Points The Country Of Caspir Produces Only Cereal And Milk 1 (128.77 KiB) Viewed 122 times

Question 3. GDP, Inflation Rate, and Unemployment Rate (17 points) The country of Caspir produces only cereal and milk, Quantities and prices of these goods for the last several years are shown in the following table. The base ycar is 2016. Milk Cereal Year Price Quantity (Dollars per box) (Boxes of cereal) 2015 4,00 100 Price Quantity (Dollars per gallon) (Gallons) 1.50 180 2016 4.00 120 2.00 200 2017 5.00 150 2.50 200 2018 6.00 180 3.50 240 a) (3 points) Calculate the nominal GDP and real GDP for 2015, 2016, 2017, and 2018, respectively. b) (3 points) Calculate the nominal GDP growth rate and real GDP growth rate for 2016, 2017, and 2018, respectively. c) (3 points) What is the GDP deflator for 2015, 2016, 2017 and 2018, respectively? What is the inflation rate (based on GDP deflator) for 2016, 2017 and 2018? d) (4 points) Suppose that there are 5 boxes of cereal and 8 gallons of milk in consumers' monthly basket. What is the CPI for 2015, 2016, 2017, and 2018? What is the inflation rate (based on CPI) for 2016, 2017, and 2018? Brietly explain why the inflation rate in part d) is different from part c). e) (4 points) Now you are asked to retrieve US data from FRED (https://fred.stlouisfed.org/). Once you have retrieved the data, a spreadsheet program will serve our purpose. (1) (2 points) Download data of US CPI for all urban consumers: all items in U.S. city average for 2010-2021. Compute the US inflation rate (based on CPI) for years 2011-2021. (ii) (2 points) Download data of US unemployment rate for 2010-2021. Plot the series of inflation rate in part (i) and the unemployment rate in part (ii) in a same graph. Please comment on interesting pattern(s) you observe from the graph (i.e., how the two series are related and why). 9