Theory of money questions | form five Economics

1. What is the difference between standard of living and cost of living?. How the standard of living and cost of living can be measured?
2. Why is the standard of living so low in less developed countries?

1. Name essentials of index numbers.
2. Given the following basket of purchases in two different years. Find the index for year two.

Discuss the shortfalls of using price index to compare living standards among countries.

1. Study a table below and fill in the blanks to show the terms of trade for country X from 2000 to 2004.

2. Study a table below assuming year 2000 is a base year , show changes in prices by filling in the blanks, give your comments on each year.

Given the following data showing purchase in year 1988 and year 2000.

Calculate Paaches and Laspers price index and interpret your answer.

Discuss the uses of price index.

What are the problems of measuring price index?

Given a table below:

Find

1. The rate of inflation in 1985
2. The increase in price between 1982 and 1985.

1. If the money GNP of an economy rose from $5000million to $5500million between 1985 and 1986 while the price index rose from 100 to 110 during the same period, what was the change in real GNP?
2. Suppose that the nominal GNP of an economy was Tshs.2billion in 1982 and Tshs2.1billion in 1983, if the price index was 120 in 1982 and 126 in 1983, then What was the real GNP?.

Given a table below which shows hypothetical basket of purches.

1. Fill in the blanks and find the price change of each commodity
2. Find the average price change.