ECO 1102 Lecture Notes - Lecture 6: Real Interest Rate, Nominal Interest Rate, Gdp Deflator

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: Najib Khan

Document Summary

Cpi: the consumer price index (cpi) is used to monitor changes in the cost of living over time. When the consumer price index rises, the typical family has to spend more dollars to maintain the same standard of living. Economists use the term inflation to describe a situation in which the economy"s overall price level is rising. The inflation rate is the percentage change in the price level from the previous period. The consumer price index (cpi) is the overall measure of the cost of the goods and services brought by a typical consumer. In canada, every month statistics canada computes and reports the cpi: it uses data on the prices of more than 600 different goods and services. Choose a base year and compute the index. Figure 6. 1 the basket of goods and services. Cpi= (price of goods and services in current year/ price of basket in base year) x100.