ECON-UA 1 Lecture Notes - Lecture 6: Intermediate Good, Real Wages, Business Software
23 Sep 2015
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Econ ua 1 - lecture 6 - problems with gdp and inflation. Problems with those approaches: changing definitions esp: final vs intermediate good, business software had been an intermediate good until 1999, now it is a part of consumer purchases, underground economy. Ignores many other aspects of economic well-being: leisure, economic bads , no distinction between voluntary and involuntary production, voluntary - goods economy voluntarily produces to satisfy our wants i. Involuntary - goods economy is forced to produce to maintain our well-being i. P = price level and price index. Price index tracks changes in prices over time. Only changes have meaning; starting value is irrelevant. = inflation rate = % in price of some period of time (usually 1 year/annualized) % x = (x new - x old) / x old. 2015 = (1. 2-1. 1) / 1. 1 = . 091 or 9. 1% In july 2011, earnings in july 2010 dollars were . 13.
