Statement - Standard - Banks Lending Decisions - Parcel - Economic Assignment Help

Assessment Task:

Statement - Standard - Banks Lending Decisions - Parcel - Economic Assignment Help 

Question 2
a. A parcel of land is worth $500,000 in 2019, but was worth $120,000 in 1985. Using prices in 1985 as the base year, know that prices in the economy have grown on average y 2.67 times between 1985 and 2019.
(i) If the price of the parcel of land had risen at the same rate as average prices, what would the land be worth in 2019? Briefly explain your answer.
(ii) Without doing any calculations, but simply based on information in the question and your response in (i), would you be better off having bought this parcel ofland in 1985 or 2019? Briefly justify your answer.

(iii) Calculate the rate of inflation between 1985 and 2019.
b. The rate of inflation in your country is highly variable. How might this affect banks’ lending decisions? Justify your answer(s).

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