The Desert Republic: Sheep, Oil, and Inflation Rate

What are the two products that The Desert Republic produces?

1. Sheep 2. Oil

What is the inflation rate in The Desert Republic?

1. 38.50%

The Desert Republic produces sheep and oil as its main products. In the base year 2010, the Republic produced 22,247 sheep at a price of $127 per sheep and 22,436 barrels of oil at $75 per barrel. In the year 2020, the quantities changed slightly with 21,761 sheep produced at $147 per sheep and 23,990 barrels of oil at $60 per barrel. The inflation rate in The Desert Republic is calculated to be 38.50%.

In economics, inflation is the rate at which the general level of prices for goods and services is rising, leading to a decrease in purchasing power over time. In the case of The Desert Republic, the inflation rate is calculated by comparing the Consumer Price Index (CPI) in the base year with the CPI in the current year.

In this scenario, the CPI is computed by dividing the cost of a basket of goods and services in the current year by the cost of the same basket in the base year and then multiplying by 100. By using the formula for calculating the inflation rate (Inflation rate = (CPI in year 2 - CPI in year 1) / CPI in year 1 x 100), we can determine that the inflation rate in The Desert Republic is 38.50%.

This means that prices in The Desert Republic have increased by an average of 38.50% over the years, indicating a significant level of inflation in the country. It is important for governments and policymakers to monitor and manage inflation to ensure economic stability and growth.