## Answers

Year | Money GDP | Real GDP | IPD |

1989 | 5544 | 5040 | 110 |

1990 | 5600 | 5000 | 112 |

1991 | 5635 | 4900 | 115 |

1992 | 5873.4 | 5020 | 117 |

1993 | 6060 | 5050 | 120 |

1994 | 6200 | 5000 | 124 |

1995 | 6272 | 4900 | 128 |

Rate of inflation between base year and 1990 = ((112-100)/100)*100 = 12 percent

Average Annual Rate of inflation between 1989 and 1994 = (((124/110)^(1/6)-1))*100 = 2.02 percent

Average Annual Rate of real growth between 1990 and 1995 = (((4900/5000)^(1/6)-1))*100 = -0.34 percent

5060 Peak 5040 5020 5000 Recession Recession Expansion g 4960 _Real GDP 4940 Plot Area 4920 4900 4880 1988 1989 190 1991 1992 1993 19941995 1996 Year

.
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