Inflation and Government Economic Policies
Inflation is a measure of how prices have changed over
time. If prices are changing due to
inflation, each dollar spent will buy less.
Questions:
What is inflation?
What are the causes of inflation? Is
inflation desirable and what can be done to control inflation in a market
economy?
What is the Consumer Price Index (CPI)? How has the CPI behaved since the year
2000? What have been the causes of these
changes? In your response, include a graph of the CPI for this period and cite
your source.
What is the Producer Price Index (PPI)? How has the PPI behaved since the year
2000? What have been the causes of these
changes? In your response, include a graph of the PPI for this period and cite
your source.
What is the Consumer Expenditure Survey (CE)? How has the Survey behaved since the year
2000? What have been the causes of these
changes? In your response, include a graph of the CE for this period and cite
your source.
What do the measures above tell us about consumer
behavior? Have incomes changed enough to
offset the inflation since 2000? What
can we predict about future inflation?
What are the implications of these measures for government economic
policies?
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