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What is the inflation rate if nominal wages increase by 3 percent and labor productivity increases by 1 percent?
103/101 = 1.0198
So, if there are no other changes, (eg in capital productivity) inflation is 1.98 %.
For small percentage changes, it is usually safe to take 3% - 1% = 2% since the estimation error in these figures is likely to be greater than the rounding error between 1.98 and 2.0
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Is the number on a baseball players uniform a ordinal number nominal number or a cardinal number?
nominal
Is number of years nominal or ordinal?
Ordinal.
Is ID number nominal or ordinal?
It is ordinal.
How do you Calculate board feet to linear board feet?
BF = nominal thickness" (t) x nominal width" (w) x linear feet'(LF)/ 12" then BFx12"/ (t)x(w)= LF so if you have 200 BF of 2x4 200'x12"/2"x4"= 2400/8= 300 LF of lumber
What is the difference between current dollars and constant dollars?
While the Current Dollar or Nominal GDP does not account for changes in the rate of inflation from one period to another, knowing the figure can still be helpful in a couple of ways. First, the Current Dollar calculation represents the market value of goods and services that are produced in the economic period under consideration. In other words, the figure represents the reality of the worth of the goods at the time they were produced. Knowing this figure is helpful in understanding exactly what was happening within a given economy at that point in time. Often, this information can help explain economic trends that emerged in later periods and why they took place. Another benefit of knowing Current Dollar GDP is that it forms the basis for comparing the actual or real amount of growth that took place between two different economic periods. By dividing Current Dollar GDP by what is known as the GDP deflator, it is possible to allow for changes in the rate of inflation between two different years. Doing so allows comparisons of the Gross Domestic Product of two different periods in terms that truly demonstrate the relative value of goods and services between the two periods. It also helps show whether there was truly any growth in the economy. For example, assume the most recently completed economic period is identified as Year A, while the previous economic period is known as Year B. If the nominal, or Current Dollar, GDP for Year A is $100B in United States dollars and the GDP deflator is 5%, this makes the Real GDP for Year A $95.24B USD. If the Current GDP for Year B came to $92B USD, then true economic growth occurred. However, if Year B had a nominal, or Current, GDP of $96B USD, this formula will reveal that the economy declined, even though there was an increase in Current Dollar GDP from Year B to Year A.
What happens to nominal wages as employment increases?
wages should increase as employment increases.
How can an increase in nominal income and a decrease in real income occur simultaneously?
real income is the change with inflation taken into account, nominal income is purely the change of income therefore if inflation was to be 5% and nominal income increased by 2% there would be a real income decrease of 3%
What would happen if nominal GDP doubles over night what statistic would you need to check before you began to celebrate?
Check the inflation rate, and the real GDP. If inflation also is very high, nominal GDP could increase despite there not being any increase in output.
Whats does an increase in nominal GDP imply?
When the nominal GDP increases it implies that prices have increased. Nominal GDP is current prices and real GDP takes prices changes into account.
Suppose a borrower and lender agree on the nominal interest rate to be paid on a loan and the inflation turns out to be higher than they expected Is the real interest rate on this loan higher?
the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.
The annual nominal rate of interest on a bank certificate of deposit is 12 percent what would be the effect of an inflation rate of 13 percent?
The 12 percent nominal interest means that your money will increase in value by 12% in a year's time in NOMINAL terms.However, the inflation rate of 13 percent says that the cost of goods will increase faster than the value of your deposit.Hence the REAL effect is that the value of your money will fall by 1 percent.
What of the following is the most direct cause of cost push inflation?
Rising production costs.
If the reserve bank wants to increase the real interest rate it must increase the nominal rate by more than that of inflation True or False?
Do you want to know this question for the test? lol
What are the causes through which nominal GDP had doubled overnight?
through inflation as nominal GDP does not account for it
Will increase in nominal money supply increase real money supply?
No because real money supply would only increase if the price level doesnt increase or increases at a slower pace than the increase in nominal money supply. This is because the real money supply takes into account the current price level.
You nominal rate the same as true rate?
No. Nominal interest rate is the rate before adjustments for inflation.
What is nominal interest?
Nominal InterestA nominal interest rate is the interest rate that does not compensate for inflation. This is used in relation to "effective interest rate" or "real interest rate."" Real Interest Rate = Nominal Interest Rate - Inflation Rate " Improvement suggested by Palash Bagchi.
