L11 Econ 1021 Study Guide - Midterm Guide: Takers, Accrued Interest, Big Mac Index
28 Apr 2017
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Wealth: income, whatever you don"t spend you save (what you don"t consume = savings), can use to invest in assets etc. In econ: income is a flow: wealth: can come from incomes you never earned and other sources. In the short run movements in apl are closely related to the overall movements of the economy up or down called business cycles (expansions/recessions) Cpi services of goods of goods services of base. Cost of base base year year basket year basket. Indexing: real 30989 * price index to find nominal wages. 1970 than in 2007: biases of cpi, boskin commission concluded that the official cpi inflation rate overstates the true inflation rate by as much as 1 to 2 percentage points a year, problems of overstating inflation. Increasing wage inequality: the problem in europe is, persistent unemployment since 1980, work is unavailable for the unskilled and sometimes even for the skilled, technological changes and skill-biased impacts having huge impacts.
