ECON102 Lecture Notes - Lecture 6: Market Basket, Root Mean Square, Producer Price Index

• School: University of Alberta
• Department: Economics
• Course: ECON102
• Professor: Andrew Wong

Document Summary

Econ 102 lecture 6 the market basket and in a9on. Steps for compu9ng data about the market basket. There are 5 steps in order to compute the various points of data that we nd useful from the market basket: fix the market basket. The basket that contains goods and services that a typical family will buy. Stats canada usually surveys for this info. You need to keep it constant so it can only measure prices. So make it as representa2ve as possible: find the prices of the individual things in the basket, compute cost of basket. Or in other words add up all the results you got in step 2: choose base year to compute cpi, compute in a9on rate with the following formula. By de ni2on, in a2on rate is the change in the cpi over two periods in 2me. Price increase from 2012 to 2013 = . 87 . 00. This year refers to 2013 in the calculaqons.