Question

The accompanying table contains two price indexes for the years $2011,2012,$ and $2013 ;$ the GDP deflator and the $\mathrm{CPL}$. For each price index, calculate the inflation rate from 2011 to 2012 and from 2012 to 2013 .

    The accompanying table contains two price indexes for the years $2011,2012,$ and $2013 ;$ the GDP deflator and the $\mathrm{CPL}$. For each price index, calculate the inflation rate from 2011 to 2012 and from 2012 to 2013 .
Economics
Economics
Paul Krugman, Robin… 4th Edition
Chapter 22, Problem 12 ↓

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The formula for calculating inflation rate is: \[ \text{{Inflation rate}} = \frac{{\text{{New Index}} - \text{{Old Index}}}}{{\text{{Old Index}}}} \times 100 \]  Show more…

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The accompanying table contains two price indexes for the years $2011,2012,$ and $2013 ;$ the GDP deflator and the $\mathrm{CPL}$. For each price index, calculate the inflation rate from 2011 to 2012 and from 2012 to 2013 .
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Key Concepts

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CPL
In the context of price indexes, CPL refers to another measure of price changes, functioning similarly to other indexes like the GDP deflator. It tracks the evolution of prices over time, and when used for inflation calculation, it provides insight into how a specific subset of goods or services is affected by inflation.
GDP Deflator
The GDP deflator is a specific type of price index that reflects the prices of all domestically produced goods and services included in the gross domestic product (GDP). It is used to convert nominal GDP into real GDP, thereby providing a measure of inflation across the entire economy.
Inflation Rate
The inflation rate measures the percentage change in a price index between two time periods, indicating how much prices have increased or decreased over that interval. It is calculated by taking the difference between the later and earlier price index values, dividing by the earlier value, and then multiplying by 100 to get a percentage.
Price Index
A price index is an economic indicator that shows the average change in prices of a basket of goods and services over time. It serves as a measure of inflation or deflation in an economy by providing a standardized metric to compare different time periods.

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The accompanying table contains two price indexes for the years $2011,2012,$ and 2013 : the GDP deflator and the CPI. For each price index, calculate the inflation rate from 2011 to 2012 and from 2012 to 2013 $$\begin{array}{|l|c|c|} \hline \text { Year } & \text { GDP deflator } & \text { CPI } \\ 2011 & 103.199 & 224.939 \\ 2012 & 105.002 & 229.594 \\ 2013 & 106.588 & 232.957 \end{array}$$

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The accompanying table contains two price indexes for the years $2002,2003,$ and 2004: the GDP deflator and the CPI. For each price index, calculate the inflation rate from 2002 to 2003 and from 2003 to 2004 $$\begin{array}{|ccc|} \text { Year } & \text { GDP deflator } & \text { cPI } \\ \hline 2002 & 104.1 & 179.9 \\ 2003 & 106.0 & 184.0 \\ 2004 & 108.3 & 188.9 \end{array}$$

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