logging in or signing up 17inflation with Voice-Over rev2 bdemory Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 33 Category: Entertainment License: All Rights Reserved Like it (0) Dislike it (0) Added: February 03, 2011 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Chapter 17 Inflation: 1 Chapter 17 InflationMeaning and Measurement of Inflation: 2 Meaning and Measurement of Inflation Inflation – an increase in the overall average level of prices, not an increase in the price of any specific product Deflation – just the oppositeConsumer Price Index: 3 Consumer Price Index Measuring changes in the average prices of consumer goods and services Reported by the (BLS) of the Department of LaborHow the CPI Computed: 4 How the CPI Computed A monthly survey is conducted Fixed-weight price index is calculated This is compared to a base yearSlide 5: 5 Composition of the CPI Food and Beverages Housing Apparel and Upkeep Transportation Medical Care Recreation Education & Communication All other goods & services 16.2% 40.0% 4.4% 17.6% 5.8% 5.9% 5.3% 4.8%How the CPI Computed: 6 How the CPI Computed Exhibit 2 on page 423Slide 7: 7 ARI = CPI - CPIPY CPIPY *ARI = Annual rate of inflation *CPIY = Consumer price index in given year *CPIPY = Consumer price index in previous year X 100Slide 8: 8 8 4 0 -4 1930 40 50 60 12 70 80 90 00 -8 -12 16 20 The U.S. Inflation Rate 1929 - 2002CPI Criticisms: 9 CPI Criticisms It can overstate or understate the impact of inflation for certain groups Does not measure quality Substitutes are ignoredConsequences of Inflation: 10 Consequences of Inflation Shrinks Income Helps/hurts wealth Real Interest Rate (vs. Nominal)Slide 11: 11 RI = NI CPI *RI = Real income *NI = Nominal income *CPI = CPI as a decimal or CPI ÷ 100Slide 12: 12 % in real income % in nominal income % in CPI = _Demand-Pull & Cost-Push Inflation: 13 Demand-Pull & Cost-Push Inflation Demand-pull – buyer induced , “too many dollars chasing too few goods” Cost-push – seller/supplier induced - supply shocks related to price/costsInflation in Other Countries: 14 Inflation in Other Countries Inflation on a Rampage Hyperinflation – 100% or more (4 causes) Wage-price spiral – wages & prices chasing each otherEND: 15 END You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
17inflation with Voice-Over rev2 bdemory Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 33 Category: Entertainment License: All Rights Reserved Like it (0) Dislike it (0) Added: February 03, 2011 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Chapter 17 Inflation: 1 Chapter 17 InflationMeaning and Measurement of Inflation: 2 Meaning and Measurement of Inflation Inflation – an increase in the overall average level of prices, not an increase in the price of any specific product Deflation – just the oppositeConsumer Price Index: 3 Consumer Price Index Measuring changes in the average prices of consumer goods and services Reported by the (BLS) of the Department of LaborHow the CPI Computed: 4 How the CPI Computed A monthly survey is conducted Fixed-weight price index is calculated This is compared to a base yearSlide 5: 5 Composition of the CPI Food and Beverages Housing Apparel and Upkeep Transportation Medical Care Recreation Education & Communication All other goods & services 16.2% 40.0% 4.4% 17.6% 5.8% 5.9% 5.3% 4.8%How the CPI Computed: 6 How the CPI Computed Exhibit 2 on page 423Slide 7: 7 ARI = CPI - CPIPY CPIPY *ARI = Annual rate of inflation *CPIY = Consumer price index in given year *CPIPY = Consumer price index in previous year X 100Slide 8: 8 8 4 0 -4 1930 40 50 60 12 70 80 90 00 -8 -12 16 20 The U.S. Inflation Rate 1929 - 2002CPI Criticisms: 9 CPI Criticisms It can overstate or understate the impact of inflation for certain groups Does not measure quality Substitutes are ignoredConsequences of Inflation: 10 Consequences of Inflation Shrinks Income Helps/hurts wealth Real Interest Rate (vs. Nominal)Slide 11: 11 RI = NI CPI *RI = Real income *NI = Nominal income *CPI = CPI as a decimal or CPI ÷ 100Slide 12: 12 % in real income % in nominal income % in CPI = _Demand-Pull & Cost-Push Inflation: 13 Demand-Pull & Cost-Push Inflation Demand-pull – buyer induced , “too many dollars chasing too few goods” Cost-push – seller/supplier induced - supply shocks related to price/costsInflation in Other Countries: 14 Inflation in Other Countries Inflation on a Rampage Hyperinflation – 100% or more (4 causes) Wage-price spiral – wages & prices chasing each otherEND: 15 END