ECON deflator for each year, using 2013

ECON 1250 Assignment 1Due Date: June 07, 2018. Please submit hard copies and electronic copies!Proposals have been made to increase government regulation of firms providing child-care services by, for instance, setting education requirements for child-care workers.

Suppose that these regulations increase the quality of child-care and cause the demand for child-care services to increase. At the same time, assume that complying with the new government regulations increases the costs of firms providing child-care services. Draw a demand and supply graph to illustrate the effects of these changes in the market for child-care services. Briefly explain whether the total quantity of child-care services purchased will increase or decrease as a result of regulation.Below are some data for a simple economy that produces only two goods: milk and honey.

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Year Price of milk Quantity of milk (liters) Price of honey Quantity of honey (litres)2013 $1 100 $2 502014 1 200 2 1002015 2 200 4 100Compute nominal GDP, real GDP and the GDP deflator for each year, using 2013 as a base year.Compute the inflation rate in 2014 and 2015 from the preceding year. Interpret the results.Did economic well-being rise more in 2014 or 2015? Explain.The data collected in the Labor Force Survey in February 2012 shows that the unemployment rate in Canada was 7.

7%, the labor force participation rate was 65.6% and employment was 16, 877,000. Calculate:The number of labor forceThe number of unemployed populationEmployment-population ratioShow the steps you follow in answering the question. Please write a short note using the data and your results.Suppose that people consume only three goods, as shown in the table below:Tennis Balls Tennis Racquets Gatorade2014 price $2 $40 $12014 quantity 100 10 2002015 price $2 $60 $22015 quantity 100 10 200If the base year is 2014, what is the CPI in both years? What is the inflation rate in 2015? Show your work.


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