Question: Hi, please help with this questions below. I will need an answer and working for this. Kindly do assist me in it. I only have

Hi, please help with this questions below. I will need an answer and working for this. Kindly do assist me in it. I only have an hour left to submit the answer. Thank you so much.

Question 2 a) Define consumer price index (CPI). Is the CPI the best measure of inflation? (4 Marks) b) Assume that the Consumer Price Index (CPI) for year 3 is 120 and the CPI for year 4 is 130. Compute the inflation rate for year 4. (3 Marks) c) Suppose that you take out a loan at the bank for RM1000 and are required to pay it back with interest of RM100 at the end of the year. Suppose that there was no inflation at all when you took out the loan. By the end of the year the price level has increased 7%. Calculate both the nominal interest rate and the real interest rate on this simple loan arrangement. (5 Marks) (Total: 12 Marks)

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