I need number 2 answered. 1) Consider the data below. Gasoline prices are nomina

Question

I need number 2 answered.

1) Consider the data below. Gasoline prices are nominal. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cons. Price Index (CPl) 90.7 93.6 93 100.0 99.6 101.3 104.5 106.6 108.2 110.0 2.31 2.62 2.843.30 2.41 2.843.58 3.68 3.58 3.44 Gasoline Price What is the base year of the CPI reported in the table above? (2 pts) 2008 is the base year with a gpi of 100 What is the price of gasoline in 2005 in constant (real) 20o8 dollars? (2 pts) Real price = nominal price / CPI = 100 X 2.31 / 90.7 = 2.546 Each panel below shows nine years of quarterly data and typities one of the four components of a time series. In the space below each panel, indicate which of these components is being represented (4 points) 2) Prce Price Q uarter l 4812 16 20 24 28336 1 204283236 Panel A: The component Panel B: Thecomponent Price Quarter Panel C: The component Panel D: The component

Explanation / Answer

2. Panel A represents Random variations which can’t be explained and do not fall under other three classifications.

Panel B represents cyclical variations. The Variations are similar to business boom bust cycles.

Panel C represents seasonal variations where variations are repeating themselves over a specific period of time.

Panel D represents trend variations where they move in upward predictable Pattern.

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