ECN 204 Lecture : Chapter 6.docx

33 views1 pages
10 Apr 2012
Department
Course
Professor

Document Summary

Govt spending is exogenous and gdp that is the endogenous. Exogenous variables changes affect the changes in endogenous variables. Consumers price index (cpi)- measures the typical consumers cost of living. Determine the basket: stats canada surveys what consumers buy. Find the prices: data on prices of all the goods in basket. Compute the basket"s cost: use data on prices to compute the total cost of the basket. Choose a base year and compute the index: cost of basket in current year/cost of basket in base year. Compute the inflation rate: inflation rate= percentage change in cpi from year to year: Cpi this year cpi last year/cpi last year. The cpi in the base year is always 100. Commodity substitution bias- the cpi overstates increases in the cost of living. Introduction to new goods- increase in variety therefore the consumer has options to find products that are closer to meet their needs.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions