Lectures_Outline_Chpt2

Cpi doesnt consider goods sold to firms to

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Unformatted text preview: DP Deflator and CPI: – CPI considers the prices of foreign made consumer goods. – CPI doesn’t consider goods sold to firms, to governments, or to foreigners. – CPI is published monthly; GDP Deflator is published quarterly. GDP deflator and CPI index in the US Why do we care about inflation ? • During periods of inflation, not all prices and wages rise proportionately – inflation affects income distribution. • Inflation creates uncertainty and makes it more difficult to make decisions. • Higher Taxation if tax brackets are not adjusted • If inflation is bad, is deflation good? Unemployment Total Population (T) ~ 317 mi Working Age Population (WA) ~ 247 mi Labor Force (L) ~ 155 mi People in the.Military, in Jail, Nursing.Homes, and Children People not looking for a job: e.g. Students,.Retirees,.Housewives, Discouraged Workers… Unemployed (U) Employed (N) ~ 144 mi Participation Rate = L / WA (~ 63%) Unemployment Rate = U / L (~ 7%) Unemployment • The unemployment rate is not a perfect indicator of the health of the l...
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This note was uploaded on 02/06/2014 for the course ECON 110A taught by Professor Staff during the Spring '08 term at UCSD.

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