ECON 104 Study Guide - Quiz Guide: Producer Price Index, Nominal Interest Rate, Gdp Deflator
Document Summary
Inflation is a general increase in the price level (an increase in our price index) It is not just an increase in prices. No: it was simply higher prices for oil. No: it is simply lower prices for computers. We measure inflation by the use of price indexes (use output index) Operationally, we define inflation as an increase in the price index. Most commonly used price index is the consumer price index (cpi) price at retail level. Put out monthly by the bureau of labor statistics price paid by consumers for final goods and services. The prices paid by urban consumers, reflects spending pattern 87% uspopulation, constructed once a month. Major uses: an overall macroeconomic indicator, a deflator of other economic series, a means of adjusting dollar values / bets index to use adjusting payments to consumers, and for identifying the real impact of price changes on consumer.
