adolph nuttin up :)
Macro Econ Hmwk
-
Alright well I’m having some trouble with my AP Macro-Economics course homework at the moment so I thought I might turn to you guys to see what happens.
1) Describe a hypothetical situation at IHOP that would result in structural unemployment.
(Easy, I got it).
2) The MPS of IHOP customers is .2 and their disposable income has increased by $10 million. If the average customer spends 3% of their ‘spending money’ at IHOP, then how much would IHOP sales incease?
I pretty much said that MPS = .2, DI = 10 Million, Savings = 2 Mill (one fifth of DI as described by MPS), Consumption is 8 Million (DI = S + C, 10 = 2 + 8), and spending is 3%
so…… 8 Mill x .03 = $240,000 spent at IHOP(Confirm?)
3) In 1986 the CPI was 108 and a ‘stack’ of IHOP pancakes cost $1.35. In 2007 the CPI was 172 and a ‘stack’ of IHOP pancakes costs $3.75. Adjust the 2007 price (nominal data) for inflation and determine the ‘real’ price of IHOP pancakes when compared to the prices in 1986.
Pretty much I have… CPI (1986) = 108, Price (1986) = $1.35, CPI (2007) = 172, Price (2007) = $3.75
So I said… Inflation = 172-108/108, >>> 64/108 >>> Inflation is 59%
And then I get stuck… Any help would be appreciated.
-
LMFAO>>> a poster named “I eat crayons” is asking others to help him finish his homework…. from axis and allies gaming forums… LMFAO!!!
LOL!!!
-
Too much to ask for a little help? Cool.
How is it any different that cyan can ask for some math help?
-
Im only saying how funny it is. If you look at the whole picture you may even agree.
If cyan did such a thing please post where that was.
-
-
Ahh i see. Your right but his isnt that funny.
-
Pretty much I have…. CPI (1986) = 108, Price (1986) = $1.35, CPI (2007) = 172, Price (2007) = $3.75
So I said… Inflation = 172-108/108, >>> 64/108 >>> Inflation is 59%
And then I get stuck… Any help would be appreciated.
Wow I’m really not very strong in economics, but I’ll take a shot anyway.
If inflation is 59% it’s 1.59
2007 price of $3.75 / 1.59 => 1986 price of $2.36Therefore the “real” price of pancakes has increased from $1.35 to $2.36, after adjusting for inflation.
-
Just remember that inflation is like coumpound interest. Each year the percentage increase is applied to a larger starting number. So the same annual percentage inflation rate will yield a hyperbolic upward curve in pricing, not a set equal rise over time.
-
@Imperious:
Ahh i see. Your right but his isnt that funny.
yeah mine was actually was for aa minis http://www.axisandallies.org/forums/index.php?topic=9622.0 it was hard to figure out the actual precatages so i asked for help. but rembeber Jenn and her is 0 postive or negative rant?
-
@Imperious:
LMFAO>>> a poster named “I eat crayons”
are you going to eat me? :lol:
-
-
So I figured it out.
If inflation is 59%, multiply the 1986 price (1.35) by (.59), which gives us roughly (.80 cents). (This is all from memory so my number may be off). So, adding 80 cents to 1.35 gives us $2.15, meaning in 2007 2.15 buys just as many pancakes as 1.35 in 1986.
-
Yes that calculation is correct, but I don’t think your conclusion is correct. $2.15 SHOULD buy you as many pancakes as $1.35 did. But it doesn’t because pancakes now cost $3.75.
But from the question it sounded like they wanted to compare in 1986 dollars, while you are comparing in 2007 dollars. (It said to adjust the 2007 price for inflation, you adjusted the 1986 price for inflation).
Your calculation of
@ieatcrayons:If inflation is 59%, multiply the 1986 price (1.35) by (.59), which gives us roughly (.80 cents). (This is all from memory so my number may be off). So, adding 80 cents to 1.35 gives us $2.15
Is the same as 1.35 x 1.59 = 2.15
But to adjust the 2007 price for inflation you have to go the other way (ie. 3.75 / 1.59). Like I posted:
Wow I’m really not very strong in economics, but I’ll take a shot anyway.
If inflation is 59% it’s 1.59
2007 price of $3.75 / 1.59 => 1986 price of $2.36Therefore the “real” price of pancakes has increased from $1.35 to $2.36, after adjusting for inflation.
-
Yes that calculation is correct, but I don’t think your conclusion is correct. $2.15 SHOULD buy you as many pancakes as $1.35 did. But it doesn’t because pancakes now cost $3.75.
But from the question it sounded like they wanted to compare in 1986 dollars, while you are comparing in 2007 dollars. (It said to adjust the 2007 price for inflation, you adjusted the 1986 price for inflation).
Thats what I figured as well, but my econ teacher said thats what he was looking for, so whatever I suppose.
-
Now who are you going to believe? Your Economics Teacher, or some random poster on an axis and allies board (who already admitted Economics was not a strength) :-D
-
Well considering the assignment was to boost my grade before final report cards, I’ll go with my Econ teacher :-P
-
If you skip the abreviations i might be able to help since im majoring in economics (going for master, thought only done 2 years of 4,5.)
I don´know how far you are into your education but ask and i might be able to help you.
Suggested Topics
