DSE 19-06

Study Tables 1 and 2 and answer the following questions.

(a) Based on Table 1, state the change in the general price level in 2017. (1 mark)

(b) On 1 January 2017, Siu Keung expected a +2.3% change of the CCPI in that year, and he lent a sum of money to Kitman at 5% interest rate per annum. On 31 December 2017, Kitman repaid the sum plus the interest to him. With reference to Table 1, explain whether Siu Keung would gain or lose. (3 marks)

(c) Kitman has been receiving the minimum wage rate per hour. With reference to Tables 1 and 2, explain how her real wage rate would change in 2017. (3 marks)