ECON 1BB3 Lecture : Should I spend my money now or save for a rainy day?

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Highest grossing movie of all time: avatar and gone with the wind. Cpi vs. gdp deflator: cpi goods and services bought by typical consumers. Gdp deflator reflects prices of all goods and services produced domestically: cpi price change, quantities stay fixed. Gdp deflator quantities change, prices stay fixed. If the cpi is overstating by 1. 1% - then their pension plans are rising. We want our cpi estimate to be accurate. Also throws off cpi seniors tend to buy more prescription drugs than the regular household. A german automobile company produces cars in canada, some of which are exported to other nations. If the price of these cars increases, the gdp deflator: If it exported all cars wouldn t be included in cpi, because it s not consumed by the avg family. Example: you have decided not to buy a pair of shoes that cost and instead put the. into a savings account earning 5% interest per year.