chap 14b - 10/28/2010 Chapter 14B Inflation and...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
10/28/2010 1 Chapter 14B Inflation and Unemployment Learning objectives ` 3. Understand how the consumer price index and the GDP d fl t h i th l l l f GDP deflator measure changes in the general level of prices ` 4. Realize how labor force participation rates and unemployment rates are determined and understand factors that influence the overall unemployment rate
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
10/28/2010 2 Price changes ` Inflation = increase in general level of prices ` Deflation = decrease in general level of prices ` Disinflation = decrease in growth rate of prices Costs of inflation ` Inflation is a problem if it is unanticipated ` Inflation helps borrowers and hurts lenders
Background image of page 2
10/28/2010 3 Measuring inflation ` 1)Consumer Price Index (CPI) ` 2)GDP deflator Consumer price index (CPI) ` CPI = measures changes in prices of goods and services purchased by the “typical urban family of 4” relative to a base period (1982 – 84) = current cost of base period "basket" 100 × base period cost of base period "basket"
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
10/28/2010 4 Spending categories in the CPI ` 7 categories ` Food & beverages ` Education ` Housing ` Apparel ` Transportation Medica ` Other ` Medical `
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

Page1 / 12

chap 14b - 10/28/2010 Chapter 14B Inflation and...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online