1) inflation refers to persistent increase in general price level
there must be a persistent increasing trend of gdp deflator >100 for a few yrs
2)nominal interest rate = real int rate + %change in price level
3) no photo: o)
hope it helps!: ) 作者: dumbo101 時間: 2015-4-23 07:35 PM
should be ok u just had ur test or r u a dse student?: ) 作者: dumbo101 時間: 2015-4-23 07:52 PM
just had my test, so difficult and dun had enough time 作者: dumbo101 時間: 2015-4-23 07:53 PM
Btw do u know why C is wrong, i hv just uploaded the photo 作者: iamgrass 時間: 2015-4-23 09:38 PM 標題: 回覆 7# dumbo101 的帖子
sorry using mobile so cant see the photo... would u mind pming me? perhaps it may help? 作者: petergarylee 時間: 2015-4-24 07:23 AM
In my point of view,(1) inflation is a persistent increase in general price level but 1 year is enough, where 1 year can be treated as long-term. (2) is bacially correct. (3) would u mind upload the photo again so I can help u?
sorry,i dont know how to upload photo. do u mind me typing out the question
Year 1's GDP deflator is 100, year 2's is 110,year 3 is 100
Which of the following statement is correct?
C.The purchasing power of money in year 2 is lower than that in year1 and 3.
I dont know why C correct. I dont know why year 2 is lower than year 3, isnt there is deflation in year 3? the purchasing power in year2 should be higher than year 3.
I think I have answer you in my page, please check the answer. I still want to mention that GDP deflator is based on the 'base year' , the above question ' Year 1's GDP deflator is 100, year 2's is 110,year 3 is 100' means that only in year 2 , the price level compare to the base year is higher as the index in more than 100, thus the purchasing power of money is the lowest among the three years. Also, under most of the conditions, with only one year's GDP deflator cannot shows whether there is an inflation or a deflation( I've explained it in my page, plz check it). 作者: dumbo101 時間: 2015-4-26 09:44 AM