QUIZ #2- N Assume the Consumer Price Index ("CPI") is used to measure the general level of prices for goods and services. The CPI is 110 at the earliest date [January 1, 20xx] (i.e. CPI} = Ii 0) and the CPI is- 121 at the latest date [December 31, 20xx] (i.e. CPI 2 = 121). The nominal rate of interest over the time period from CPI, to CPI 2 has been 9% per annum. a " , " I , , ', , 2. (20 points) What is the percentage change in the general level of prices for goods and services from the date of CPI} to CPI 2 ? Show all calculations . . ,.1 110 \f1T !I 0 __ ,----1TC) 3. (10 points) In this example, has the economy experienced inflation? Or deflation? i nf \oJ-iO\f\ V 4, (20 points) From the date of CPI} to CPh, what has been the average per annum real rate of interest? Show all calculations. 'iZI - \to [I -y~ - ...