ECON 201 Lecture Notes - Lecture 6: Price Level, Nominal Interest Rate, Real Interest Rate

• School: University of Maryland
• Department: Economics
• Course: ECON 201
• Professor: John Neri

Document Summary

The cpi: cpi: an index of the cost over time of a market basket of goods purchased by a typical household, cpi includes, the part of gdp that consumers purchase as final users, household purchases of used goods such as used cars or used computers, household purchases of imports, cpi does not include, goods and services purchased by anyone other than consumers, prices of assets such as stocks, bonds, and homes, cpi market basket, collection of goods and services that the typical consumer buys. Calculating the cpi: define a market basket, determine how much it would cost to purchase the market basket in the current year and in the base year, divide the dollar cost of purchasing the market basket in the current year by the dollar cost of purchasing the market basket in the base year, multiply the quotient by 100.