CAS EC 102 Lecture Notes - Gdp Deflator

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: Neil Watson

Document Summary

Gdp deflator: the nominal gdp divided by the real gdp and then multiply by 100. P stands for the price level (measured by cpi or gdp deflator) Stands for inflation: = percentage change in p or % p, computed by subtracting gdp deflator of earlier year from later year, dividing by earlier year and then multiply by 100. Consumer price index (cpi: measures changes in the prices of things that an average consumer buys, the most closely watched indicator of what is happening to prices, released in the middle of every month, uses: Tracks changes in the typical household"s cost of living. If cost of living increase 3%, pay increases by 3% Allows comparisons of dollar amounts over time. Calculation of inflation rate with cpi: computed by subtracting cpi of earlier year from later year, dividing by earlier year and then multiply by 100. Gdp day 1, p1: 24*2 + 10*10 = 48 + 100 = 148.