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Inflation has a dual effect of rising prices of essentials necessities and reducing the value of money, causing adverse affects on the economy. High inflation rate affects business sectors, household sector and specially the poor sector. It
reduces the level of the savings and makes difficult to maintain the current living standard. It increases of Cost of production, reduces Quality, making products less competitive in international market and affects negatively balance of payment. To control inflation, monetary authorities increase interest rate, increases cost of borrowing which reduce investment & consumption and leads towards high unemployment and low economic growth of the economy. Pakistan has been included in the list of countries having highest inflation rate in the world. History proves that Pakistan has the most unpredictable and varying inflation rate in the world. Major cause is political instability and the decline in the value of Pakistani Rupee which act as a hurdle to stabilize the inflation rate and such fluctuations are being observed on regular basis.You are residing in Islamabad and you are interested to know the annual fluctuations and variations of inflation rate in 2012, 2013 and 2014 in your location at both consumer level as well as the producer level.
Now go to your LMS interface and access a “4-page PDF Document: Price Indices Assignment MGT411.pdf” uploaded there in the “Downloads” tab. Get this document downloaded, extract
data and solve the following assignment:
• For CPI: basket of goods include 4 items that are given in the “4 pages PDF document”
at serial # 5, 37, 40 and 49 which are: “Bread (Plain Medium Size), Lawn, Chappal
(Spounge Bata, Gents) and Petrol (Super” with the quantities (same for each year) of 21,
32, 44 and 35 respectively.
• For GDP: Use the following formulas to get the figures of nominal GDP and Real
For more help and detailed example download PPT file:” Nominal and Real GDP Calculation.ppt ” under the downloadtab at the VULMS of this course. Use the following data for nominal and real GDP:
Required : Determine the inflation rate from the following perspectives for financial year 2013 & 2014 considering 2012 as the base year:
a) Consumption perspective; & (5 Marks)
b) Production of years (5 marks)
(Hint: Quantities remain the same for consum ers and vary for producers in the mentioned three years)
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average price leni h ya kisi city ki?
in assignment is cleary told that u have given a price of islamabad.
plzzzzz discuss about this assignment
koi to discuss karo?
Toooooo Much Easy Assignment :P
ok then give me solution file hurry.... ......
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Formula for CPI
CPI2012 = Cost of basket in the current period / Cost of basket in base period * 100
Formula for inflation
Inflation rate =CPI current period – CPI preceding period/CPI preceding period*100
Formula for Nominal and real GDP
NGDP2012 = Q2012 x P2012
RGDP2012 = Q2012 x P2012 (Take prices of the base year only)
Formula for GDP deflator
GDP Deflator 2012 = (NGDP2012 / RGDP2012) * 100
Inflation rate 2013 = (GDP Def2013 – GDP Def2012)/GDP Def2012 x 100
Calculate CPI, NGDP, RGDP and GDPDeflator for every year.
Pick price from the provided data of isl only.
In part a Quantity remains the same i.e 21, 32, 44, 35 for all the years.
In part b Take quantities as per table in the assignment file.
plz send any idea solution of assignment
plz koi to idea discuss karo....