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Unformatted text preview: ers for the higher level of prices today. To compare Ruths salary to those of todays players, we need to inflate Ruths salary to turn 1931 dollars into todays dollars. A price index determines the size of this inflation correction. 1965 Percent per Year 15 CPI GDP deflator 10 5 1970 1975 1980 1985 1990 1998 1995 Figure 23-2 T WO M EASURES OF I NFLATION . This figure shows the inflation ratethe percentage change in the level of pricesas measured by the GDP deflator and the consumer price index using annual data since 1965. Notice that the two measures of inflation generally move together. S OURCE: U.S. Department of Labor; U.S. Department of Commerce. The price may seem a little high, but you have to remember thats in todays dollars....
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10