hey i have a few questions i have no idea how to do them and the test is tuesday

if price index in 2002is 120 and price index in 2003 is 110, then the rate of inflation is what?

if GDP goes up what will happen?

Hello! I'm here to help you with your questions. Let's break them down step by step:

1. Calculating the rate of inflation:
To calculate the rate of inflation, you need to compare the change in price index from one year to another.

The formula to calculate the rate of inflation is:

Rate of Inflation = ((New Price Index - Old Price Index) / Old Price Index) * 100

In your case, the price index in 2002 is 120, and the price index in 2003 is 110.

Using the formula, we can calculate the rate of inflation:

Rate of Inflation = ((110 - 120) / 120) * 100

Simplifying further:

Rate of Inflation = (-10 / 120) * 100

Rate of Inflation = -8.33% (rounded to two decimal places)

So, the rate of inflation is -8.33%.

2. Impact of GDP increase:
When GDP (Gross Domestic Product) increases, it generally suggests that the economy is growing. There are several positive effects of an increase in GDP:

a. Higher income and standard of living: As GDP grows, people tend to earn higher incomes, leading to an improved standard of living.

b. Increased employment opportunities: Economic growth often leads to more job opportunities, reducing unemployment rates.

c. Investment and business expansion: An increase in GDP indicates a favorable business climate, encouraging companies to invest and expand their operations.

d. Government revenue: A higher GDP can result in increased tax revenues for the government, which can be used for public services and infrastructure development.

Keep in mind that GDP growth can also have some negative consequences, such as potential inflationary pressures or increased environmental impact. However, overall, a growing GDP is generally seen as a positive indicator of economic health.

I hope this helps you understand how to approach these questions! If you have any further questions, feel free to ask.