ECON 208 Chapter Notes - Chapter 2: Canadian Natural Resources, Potashcorp, Goldcorp

• School: McGill University
• Department: Economics (Arts)
• Course: ECON 208
• Professor: Wendy Dickinson

Document Summary

In chapter 2 of the textbook we explain the meaning and construction of index num- bers. The examples we discussed were index numbers for the output of newsprint and steel. Both were relatively simple index numbers because each one showed the move- ment of just a single variable over time the quantity produced of some commodity. We also talked briefly about more complex index numbers, ones that show the move- ment of an average of several variables. A well-known example of such a complex index number is the consumer price index (cpi), an index number showing the change in the average price of the many goods and services purchased by typical consumers. The cpi is more complex than the steel and newsprint index numbers that we examine in chapter 2 because it is necessary to first compute the average price of the typical consumer"s basket of goods and services.