16466 Chapter Notes - Chapter 13: Real Interest Rate, Nominal Interest Rate, Real Income
Document Summary
Economics for today inflation & unemployment chapter 13. Inflation is an increase in the overall average price level of goods and services in the economy. It is not an increase in the price of a specific product: cpi is an index that measures changes in the average prices of consumer goods and services. How the cpi is computed: the australian bureau of statistics (abs) conducts quarterly surveys of the prices of items typically purchased by an average family, called the market basket. It is a fixed-weight price index the composition of the basket remains unchanged from one period to the next. How the cpi is computed: the cpi formula is: If 2005 is the base year, then the cpi for 2015 is /245 x 100 = 136. 7. The annual rate of inflation: the annual rate of inflation is the percentage change in the cpi from one year to the next.
