QUESTION TWO The Central Statistical Office reported the following total manufac

ID: 1138957 • Letter: Q

Question

QUESTION TWO The Central Statistical Office reported the following total manufacturing shipments for the 3 years from 1997 through 1999 Year 1997 1998 1999 Manufacturing Shipments (K' billions) 3929 4052 4260 (a) The CPI for 1997-1999 is given in table below. Use this information to deflate the manufacturing shipments series and comment on the pattern of manufacturers shipments in terms of constant kwachas. HOURLY WAGES OF MANUFACTURING WORKERS AND CONSUMER PRICE INDEX: 1996-2000 Year 1996 1997 1998 1999 2000 Hourly Wage (K) 12.77 13.11 13.46 13.93 14.36 CPI (1982-1984 Base) 156.9 160.5 163.0 166.6 172.6

Explanation / Answer

a. The formula to defalte series = Nominal value/Price index of respective year

Year

Manufacturing shipments (K, billions)

Deflate manufacturing shipments (K, billions)

1997

3929

1.605

2448

1998

4052

1.63

2486

1999

4260

1.666

2557