1303AFE Economics For Dec Making 1

Question:

Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Symposia’s consumption in 2017

Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Symposia’s investment in 2017

What was Symposia’s GDP in 2017?

A.A worker was paid $100,000 in 2019, but for doing the exact work, was paid $85,000 in 2010. Within this time period, the rate of inflation grew by 32%.

(i)Would the worker have been better off linking her wages with the rate of inflation? Justify your answer.

(ii)What is her real wage rate in 2019 in terms of 2010 dollars, assuming CPI in 2010 was the base year?

(iii)Assume the worker did have the option of linking her wages with the rate of inflation but chose not to. Based on your understanding of the topic, provide one potential reason why she chose not to so, and justify your answer.

B.Why might bank customers be reluctant to borrow money if deflation occurs from time to time, and does so unexpectedly? Justify your answer(s).