The Consumer Price Index (CPI).

The Consumer Price Index (CPI). The most widely used measure of inflation is the consumer price index, also known as the CPl. calculated by the Bureau of Labor Statistics (BLS). The CPI measures the cost of buying a standard basket of goods- at different times. The...

Price Indexes

Price Indexes W’hen newspapers tell us “Inflation is rising” they are really the movement Of a price index, A price index is a weighted average of the prices of a number of goods and services. In constructing price indexes. economists. weight...

Omitted Environmental Damage

Omitted Environmental Damage In addition to omitting activities,sometimes GDP omits some of the harmful side effects of economic activity,An important example is the omission of environmental damages. For example, suppose the residents of Suburbia buy 10 million...

Omitted Non market Activities

Omitted Non market Activities Recall that the standard accounts include primarily market activities. Much useful economic outside the market. For example, college students are in human capital. The national accounts record the tuition, but they omit the opportunity...

BEYOND THE NATIONAL ACCOUNTS

BEYOND THE NATIONAL ACCOUNTS Advocates of the existing economic and social system often argue that market economies have produced ‘a growth in real output never before seen in human history. “Look how GDP has grown because of the genius of free...

Saving and Investment

Saving and Investment As we have seen, output can be’ either consumed or invested. Investment is an essential economic activity because it increases the capital stock available for future production. One of the most important points about national accounting is...