ECON 102 Chapter 11: Chapter 11

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13 Jan 2018

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ECON 102 Full Course Notes

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Inflation rate is the percent change in the price level from the previous period. 11-1 the consumer price index the consumer price index (cpi): a measure of the overall cost of goods and services bought by typical consumer. Gdp deflator is another measure of the overall level of prices how the cpi is calculated: (cid:1867)(cid:1866)(cid:1871)(cid:1873)(cid:1865)(cid:1857)(cid:1870) (cid:1870)(cid:1855)(cid:1857) (cid:1866)(cid:1856)(cid:1857)(cid:1876)=(cid:3045)(cid:3030)(cid:3032) (cid:3042)(cid:3033) (cid:3029)(cid:3028)(cid:3046)(cid:3038)(cid:3032)(cid:3047) (cid:3042)(cid:3033) (cid:3034)(cid:3042)(cid:3042)(cid:3032)(cid:3046) (cid:3028)(cid:3041)(cid:3031) (cid:3046)(cid:3032)(cid:3045)(cid:3049)(cid:3030)(cid:3032)(cid:3046) (cid:3041) (cid:3030)(cid:3048)(cid:3045)(cid:3045)(cid:3032)(cid:3041)(cid:3047) (cid:3032)(cid:3028)(cid:3045) (cid:3045)(cid:3030)(cid:3032) (cid:3042)(cid:3033) (cid:3029)(cid:3028)(cid:3046)(cid:3038)(cid:3032)(cid:3047) (cid:3041) (cid:3029)(cid:3028)(cid:3046)(cid:3032) (cid:3032)(cid:3028)(cid:3045) (cid:883)(cid:882)(cid:882) (cid:1866)(cid:1858)(cid:1864)(cid:1872)(cid:1867)(cid:1866) (cid:1870)(cid:1872)(cid:1857) (cid:1866) (cid:1877)(cid:1857)(cid:1870) (cid:884)= (cid:3041) (cid:3032)(cid:3028)(cid:3045) (cid:2870) (cid:3041) (cid:3032)(cid:3028)(cid:3045) (cid:2869) (cid:3041) (cid:3032)(cid:3028)(cid:3045) (cid:2869) inflation rate: the percent change in the price index from the preceding period. Price index: a measure of the cost of a basket of goods and services bought by firms. (cid:883)(cid:882)(cid:882) problems in measuring the cost of living substitution bias: when prices change from one year to the next, they do not all change proportionately.

Related Questions

Measures of Inflation The GDP deflator is the broadest, most inclusive measure of change in the country's price level since it includes all final goods and services produced and sold. But the GDP deflator is not used by the government or economists as the benchmark measure of inflation; instead, the consumer price index (CPI) is used to determine changes in the cost of living. What is the shortcoming of the GDP deflator as a measure of inflation for households, and why is the CPI considered to be a more useful measure?

greycoyote29

There are many different types of market baskets that economists measure. For example, the market basket for consumers called the 'Consumer Price Index' tracks the prices associated with the typical consumer's purchases of goods and services. The 'Producer Price Index' tracks the prices that firms receive when selling their goods and services.

Indicate the appropriate market basket to use in each of the following instances.

Consumer Price Index:

a)	Measuring differences in the cost of living between different cities.
b)	Examining price changes that might affect businesses.
c)	Measuring the cost of living for a typical consumer.

Producer Price Index:

A)	Measuring differences in the cost of living between different cities.
B)	Examining price changes that might affect businesses.
C)	Measuring the cost of living for a typical consumer.

amaranthbuffalo689

Table 24-7. The table below applies to an economy with only two goods â hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs.