Problem: Price Index
Year Current price Base yr price Price index 2006 1 1 100 Price index = (Current price/Base yr price)*100 2007 1.25 1 125 2008 1.34 1 134 2009 1.46 1 146 Consider the price index above. What are the values for A, B, and C? Was there inflation from 2006 to 2009? If the price changes above occurred for all goods across the economy during the four year period, explain how nominal GDP and real GDP would differ.
What is inflation, and how does it affect consumers? Is inflation always bad? Describe a situation where inflation is positive?
The response must include a reference list. One-inch margins, double-space, Using Times New Roman 12 pnt font and APA style of writing and citations.