econ-journal 5

econ-journal 5 - the demanded quantity will drop as the...

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New York Times: Consumer Prices Fall on Lower Energy Costs By CATHERINE RAMPELL Published: September 16, 2008 According the New York Times (09-16), “The Consumer Price Index, a measure of retail goods and services in a selection of American cities, fell 0.1 percent in August from the previous month, after a 0.8 percent monthly increase in July and a 1.1 percent increase in June. Year over year, prices were up 5.4 percent, just below July’s 17-year high of 5.6 percent”. This reflects the law of demand, which indicates
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Unformatted text preview: the demanded quantity will drop as the price goes up. However, in recent couple of weeks when oil prices keep reducing, the consumer prices relatively go down. Oil (or transportation) is now considered to be the complementary good as it involves (or goes with) in almost all production (or industries). Therefore, the changes in oil prices will lead to the shift in other goods demand....
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