Evaluation of Macroeconomic Performance in Australia and the US from 1990-2013

Evaluation Of Macroeconomic Performance Of Australia
Evaluation of Macroeconomic performance of Australia and US from 1990 to 2013
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Course Title Table of content
Executive summary
1. Macroeconomic performance of Australia
2. Key macroeconomic indicators:
2.1 Real Gross Domestic Production
2.2 Interest rates
2.3 Unemployment rate
2.4 Consumer Price Index (CPI):
2.5 Exchange rate
2.6 Exports and imports
3. Macroeconomic performance of United States of America:
3.1 Real Gross Domestic Production:
3.2 Annual inflation rate in the United States
3.3 Unemployment rate in USA
3.4 Consumer Price Index (CPI):
3.5 Exports and imports of trade goods
3.6 Interest rate
4. Real GDP growth related to the other indicators
5. Correlation between interest rate and inflation and interest rate and unemployment
6. Macroeconomic indicators in both countries correlated
7. Monetary policy been tighter in the past decade
8. Prediction of the macroeconomic outlook of Australia & United State of America
9. Conclusion Executive summary
The paper is the Evaluation of Macroeconomic performance of Australia and US from 1990 to 2013.
The Australian economy has encountered persistent development and components low
unemployment, contained swelling, low open obligation, and an in number and stable budgetary
framework. By 2012, Australia had encountered over 20 years of preceded with financial
development, averaging 3.5% a year. The US has the biggest and most innovatively capable
economy on the planet, with a for every
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The Consumer Price Index ( Cpi ) Essay
Chapter 7 and 8 from "A Guide to Everyday Economic Statistics" explains the value of prices,
money, and interest rates alongside the value of stock prices and international trade. As a result, we
will be able to grasp the concept of how the Consumer Price Index (CPI), how to use an estimate the
inflation from the CPI, Producer Price Index (PPI), prime rate and how to measure the Dow Jones
Industrial Average (DJIA) and international value of the dollar in the stock market.
Introduction
The Bureau of Labor Statistics (BLS) of the U.S. Department of releases the statistics of every part
of that consist of prices, money and interest rates. The BLS produces a cost or living index on a
monthly bases with the understanding of what CPI would produce. Therefore, BLS publicizes the
measure the change between the producer and the first producer of the purchaser by the PPI.
Although, BLS release statistic on CPI and PPI, DJIA measure the stock market performances. The
international value of the dollar referred to the issue of purchase power in terms of other currencies.
Application
Consumer Price Index. A measure used for estimation of price changes in the market basket of
goods and services representative of consumption expenditure, CPI is not part of the cost–of–living
index, however, it is based on prices of food, clothing, shelter, fuels, transportation fares, charges for
services, drugs, and other goods and services that people buy for day–to–day living. Consumer Price

Pivot Table: Case Analysis
Pivot Table Assignment
The Bureau of Labor and Statistics groups the Houston area consumer price index for government
expenditures into a 3 counties. Economically, Houston, Galveston, and Brazoria are considered a
tri–area index and are placed together into regional operations. Medical care expenditures for the
region are reported to have a consumer price index change at 2.1% since 2014. In comparison,
HCRIS continues effort to report public information about Healthcare costs and estimates through
any hospital or organization that receive financial reimbursement from the department of Health and
Human Services. The reports are considered authenticated and an accurate representation of
healthcare costs or expenditures within the United States. Institutional providers that receive
government reimbursement are required by law to submit their reports to Medicare, or the Medicare
reportable contractor. These reports are then compiled and reported in a CSV file for consumer and
public analysis.
Evaluation of CMS Payment and Value of Care ... Show more content on Helpwriting.net ...
Texas and the 3 counties were selected to mirror the healthcare costs reported to the department of
labor and statistics with the average payouts for the reportable CMS metrics. These metrics were
utilized to determine cost payouts for each institution within the Houston area. The total claims were
calculated using average costs for Heart Attacks, Heart Failures, and Pneumonia patients for each
intuition. CMS chose these metrics as an underlying representation of what is actually paid out to
the Houston area

Sentiment In The United States
In the United States, consumer sentiment is measured primarily using two measures: Consumer
Confidence Index (CCI) and the University of Michigan Consumer Sentiment Index. Both of these
measure the degree of optimism consumer's express about the economy and their personal
financial/employment situation. This is a key element in determining economic health, as 70% of
economic activity comes from consumer spending. Consumer sentiment can both a positive and
negative effect on the speed of an economic recovery.
Since consumer sentiment is a dimension of behavioral economics, there are a lot of factors that
impact consumer confidence beyond their actual economic significance: unemployment, presidential
elections, war, interest rates, inflation, federal budget, international news, terrorist attacks, oil prices,
housing market, certain times of the year (fall, summer, etc.), and even the weather. Perceptions can
change quickly, and the news media can widely influence consumer's opinion of the state of the
economy. ... Show more content on Helpwriting.net ...
If consumers are nervous, companies will cut back on production, hours and hiring, which in turn
will make consumers even more nervous. Businesses may delay investing in expansion, banks will
tighten the lending rules, and consumers will hold back on major purchases, like houses and

Exchange Rate Essay
Introduction
Finance plays and important role in our day–to–day routine. Considering the value of money,
countries and people have started investing them into other countries and shares. Investing money in
other countries is principally dependent on currency exchange rates.
Due to fluctuating nature of Foreign Exchange Rate, forecasting of currency exchange rate has
become an important factor in financial sector. By anticipating currency exchange rate investors can
gain more profit into their business
The main aim behind this assignment is to forecast exchange rate of USD with the help of Data
Mining which will be more reliable and process efficient.
Problem Definition
1.1 What is the background of the research?
Many ... Show more content on Helpwriting.net ...
As it is very difficult to predict foreign exchange market several models are used to get the result
accurately. Data from 2000 to 2017 are only considered in this assignment due to large volume of
data are present in real time. Dataset in this assignment consists of (Interest rate, Inflation rate
(Consumer price index), Gross domestic value, Shares etc.) which mainly influences forex rates.
This process involves several process of implementation from requirements gathering, Data
collection, and development of the architecture, pre–processing of data, data analysis and
evaluation.
Data Collection
Foremost step in order to start with this assignment is collection of the dataset. Forex datasets of
United States Dollars–USD are used and data assembling are explained in detail below.
The historical data of foreign currencies exchange rate of New Zealand Dollars – NZD against
United State Dollars – USD are collected from http://www.rbnz.govt.nz/statistics/key–graphs/key–
graph–mortgage–rates.The factor that influenced the Forex rate are considered and their respective
dataset are collected individually.
Interest rate, Gross Domestic Product, Inflation rate / Consumer price index, Debt of the country,
Producer price index, Share Prize and Gold prize are the important determinants influencing Forex
rate.
The rate of interest charged by the country for any financial transaction is the major factor which
influences the

Economics Of The Federal Reserve System Is The United...
Dear Mr. Peter Politico, Hello I am Kim Billiot, I have been hired as your economics advisor to help
you further understand the concepts and give guidance on economics and provide you with
knowledge resource that will help you for your debate. Detail below explain the term of economics
and have been broken down to further explain each concept and explanation to why these events
occur. Good luck on your debate and if you should need any further assistance I am happy to oblige.
To start off The Federal Reserve System is the United States central bank. The Federal Reserve
System was founded by Congress in 1913 to provide a safer nation for everyone by giving stable
monetary and financial system. Throughout the years, their roles in banking ... Show more content
on Helpwriting.net ...
The economy has a continuing path of expansion and contraction; these are the fluctuations that
create a business cycle. The GDP gives the sum total of consumer spending, industry investment,
exports compared to imports and our government spending. The GDP increase does not reflect the
correct growth of the economy and inflation must be subtracted to reflect the true percentage, this is
called the real GDP and tells us if the economy is expanding or contracting. If the economy falls we
start a recession. The point when expansion becomes a recession becomes the peak of business cycle
and the point when recession becomes expansion is the trough. Inflation describes the increases in
the average price and deflation is the decrease of the average price. Both inflation and deflation are
the percentage rate that changes the price index and hurts the value of real money. Inflation is an
increase in the general price of goods and services over a period of time. Unexpected inflation
benefits the borrowers and hurts the lenders. Inflation is the reduction in purchase power. Inflation
affects the value of money. Inflation or deflation is the percentage change of price index, once these
calculations take effect we can use the (CPI) consumer price index and is widely used in the United
States to level out price changes. Normal values are converted to real values by dividing the price
index.

Econ 214 Exam 1 Complete Solutions Correct Answers Key
ECON 214 exam 1 complete solutions correct answers key Click Link Below To Buy:
http://hwcampus.com/shop/econ–214–exam–1–complete–solutions–correct–answers–key/ Or Visit
www.hwcampus.com Two different versions Version A Quiz Question 1 Structural unemployment
is: Question 2 Which of the following equations represents the labor force participation rate?
Question 3 The concept of a price index is that: Question 4 Use the following table to answer the
questions that follow: According to the table, the labor force participation rate in this economy is
equal to: Question 5 If the relevant population is 268 million people and the number of people in the
labor force is 148 million, the labor force participation rate is: ... Show more content on
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Question 31 In Bovania, cattle compose 48% of the consumer price index (CPI), housing composes
32%, and entertainment accounts for the remaining 20%. If, in a certain year, the price of cattle rises
by 30% and the price of housing rises by 25%, then: Question 32 Which of the following conditions
might cause the unemployment rate to be less than the natural rate of unemployment? Question 33
Consider the following data that gives the quantity produced and unit price for three different goods
across two different years to answer the questions that follow: Assume that the base year is 2012.
What was the real GDP in 2013? Question 34 Consider the following data that gives the quantity
produced and unit price for three different goods across two different years to answer the questions
that follow: Assume that the base year is 2012. What was the growth rate of real GDP between the
two years? Question 35 Suppose a basket of goods and services has been selected to calculate the
consumer price index (CPI) and 2002 has been chosen as the base year. In 2002, the basket's cost
was $76.00; in 2004, the basket's cost was $79.50; and in 2006, the basket's cost was $85.00. The
value of

Essay Present Day Macroeconomy
After nearly two years of sluggish economic growth, the pace of economic expansion has finally
began to accelerate. Today the U.S. economy is strong and getting stronger. After experiencing a
series of significant shocks during the previous years – recession, dot–com collapse and stock
market meltdown, terrorist attacks, and corporate wrongdoing, the American economy has managed
to remain optimistic. Over the past three quarters, real GDP has grown at the fastest pace in nearly
twenty years. Job creation is moving into full gear. The economy has posted steady job gains for
each of the last ten months – creating more than 1.5 million new jobs since August. Inflation
remains low by historical standards, with the CPI (Consumer Price ... Show more content on
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One explanation for this deceleration is due in part to the increased number of imports the United
States had during the second quarter.
To comprehend GDP as an indicator of economic activity, we must fully understand each of its four
sub–categories. Consumption is the spending by households on goods and services, with the
exception of purchases of new housing. Personal consumption expenditures are broken down into
durable goods, nondurable goods, and services. The Bureau of Labor Statistics states that personal
consumer expenditures have been increasing every quarter from August of 2003 to August of 2004
with a gradual deceleration. The percent change from August 2003 to August 2004 on all item
expenditures is 2.1%. The majority of these expenditures are found in services. According to The
Heritage Foundation, Policy Research and Analysis, the workforce is transitioning. Already over 80
percent of United States workers are in the service industry, mostly with high skills and pay.
Manufacturing jobs have declined from 17 million in the late 1990s to 14.4 million jobs today.
Knowing that our economy is putting continual emphasis on service business, it easy to understand
why this area of the economy is where most of Americans money is spent. Nondurable goods follow
close behind; as they seem to contain the necessities and fundamental expenditures every household
endures. These include food,

Economic Factors In Australia
Economic indicators provide information of certain economic factors, which define the economic
condition of the country. Economic indicators can be leading, lagging or coincident indicators.
Among all these indicators, leading indicators are known to be the most useful economic indicators
used, due to its predictive value for investors. It is forward–looking, and provides meaningful
statistics of the leading direction of the economy (O'Sullivan & Sheffrin, 2003). The three leading
indicators that will be discussed are business confidence, stock market and government bond.
Business Confidence
Financial Times Ltd (2014) defines business confidence as an economic indicator that provides an
overview of the state of the economy, based on how the ... Show more content on Helpwriting.net ...
The average Australia Government Bond 10Y is 7.75 from 1969 up to date, the highest and lowest
government bond is 16.40 in May 1982 and 2.69 in July 2012 respectively (Trading Economics,
2014).
United States Government Bond 10Y
The United States Government Bond 10Y has decreased from 2.55 in July to 2.38 percent in August
2014. The average United States Government Bond 10Y is 6.39 from 1912 up to date. The highest
and lowest government bond is 15.82 in September of 1981 1.40 in July of 2012 respectively
(Trading Economics, 2014).
Australian economy for the next twelve months
The Conference Board Leading Economic Indicator (LEI) for Australia has shown an increased in
May after a slight decline in April. Besides, the six–month growth rate in the leading economic
index has also improved to 2.1 percent growth between November 2013 and May 2014, up from 1.4
percent for the previous six months. Therefore, its strengths among the leading indicators will be
more than the weaknesses, hence there is a positive outcome for the next 12 months for Australian
economy (The Conference Board,

Inflation Can Be Measured By Consumer Price Index Or Cpi?
We've all heard the "Back in my day", stories for our parents and grandparents enlightening us on
the prices they used to pay for certain items. It's hard to imagine a time when a bottle of Coke–a–
Cola cost only fifty–cents. One may think, "That's not true, you couldn't possibly purchase anything
for that cheap". Although this seems impossible, prices fluctuate on a daily basis. This price
fluctuation is known as inflation. Inflation is a continual escalation in the aggregate or general price
level in an economy. In simpler terms, it means there is an increase in the cost of living and that
your money might not buy as much today as it could in earlier times. To fully understand inflation
one must know how it is calculated. Inflation can be measured by evaluating the Consumer Price
Index or CPI. Doing so shows what the increase in general prices of a consumer's "basket" are over
a given amount of time. It can also be measured by looking at the real Gross Domestic Product or
real GDP of an economy over time, that being the deflated nominal GDP. Our group will
concentrate on the 1940's, analyzing the changes of inflation before, during, and post–World War II.
Our case study is titled The American Economy During The 1940's. Our case study focuses on wage
and price controls, rationing, WWII recovery, industrial production, household income, consumer
costs, and monetary policy. The purpose of this case study is to take what we have learned in class
and apply it to the United

Economic Indicators Paper
Economic Indicators Paper
What does it mean when someone refers to the health of an economy? Furthermore, how can one
classify an economy? Americans love to quantify data. Because of this inherent need to compare
data, economists have developed a way to collect nearly every type of statistics that may reveal the
general health of the economy. These statistics actually tell if the economy is productive and
efficient or if it is slow and inefficient. Included in these statistics are Gross Domestic Product
(GDP), Consumer Price Index (CPI), Unemployment Rate, Retail Sales, Producer Price Index (PPI),
and Personal Income. Included in this paper, Team A defines the preceding six indicators, and
describes their status. Additionally, a ... Show more content on Helpwriting.net ...
There have been many indicators that have been developed to measure inflation. The CPI measures
inflation as experienced by consumers through their everyday expenses. The Producer Price Index
(PPI) measures inflation during the early stages of business development, such as production and
sales. The best measure of inflation for a given application depends upon how one intends to use this
data. CPI allows businesses to adjust prices based upon a comparison of the current cost of a defined
set of goods and/or services to the cost of those same goods at a time in the past. It is also, "the best
measure to use to translate retail sales and hourly earnings into real or inflation–free dollars" (2005).
The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the
effectiveness of government economic policy. It provides information about price changes in the
Nation's economy to government, business, labor, and private citizens and is used by them as a
guide to making economic decisions. In addition, the President, Congress, and the Federal Reserve
Board use trends in the CPI to aid in formulating fiscal and monetary policies.
Retail Sales Retail sales, represent an important component in the economy. Products sold by
companies, such as Target and local retail stores are tracked and reported to the Census Bureau. The
Census Bureau compiles this data on a monthly basis

Real Gross Domestic Product Is An Inflation Adjusted Measure
Real Gross Domestic Product is an inflation–adjusted measure that reflects the value of all goods
and services produced by an economy in a given year. Real Gross Domestic Product accounts for
changes in price level and provides a more accurate figure of economic growth. The government
uses Gross Domestic Product as a tool to analyze the economy's purchasing power and growth over
time. This is done by looking at the economic output of two periods and valuing each period with
the same average prices and comparing the two together ("Real Gross Domestic Product (GDP) |
Investopedia").
The Gross Domestic Product growth rates have declined from the years 2005 to 2008, then
increased from the years 2009 to 2010 dramatically, but started to ... Show more content on
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Changes in Consumer Price Index are used to assess price changes associated with the cost of living
("Consumer Price Index | Investopedia"). From the data I collected the Consumer Price Index has
been steadily increasing from the years 2005 to 2014, but in 2015 the Consumer Price Index has
decreased by 109.719, in 2014 the Consumer Price Index Average was 236.736 then in 2015 the
Consumer Price Index Average dropped to 127.017.
Inflation is defined as a sustained increase in the general level of prices for goods and services. As
inflation rises, every dollar someone owns, buys a smaller percentage of a good or service. There are
two types of inflation: Demand–Pull Inflation and Cost–Push Inflation. Demand–Pull Inflation is if
demand is growing faster than supply, prices then increase. Cost–Push Inflation is when companies'
costs go up, so increased costs include wages, taxes or increased costs of imports. From the data, I
found the year with the highest inflation rate was 2008 with a rate of 3.85 %, the year with the
lowest inflation rate was 2015 with a rate of 0.12%. In the year 2009, the inflation rate was negative
(–0.34 %) meaning deflation happened ("Consumer Price Index Data from 1913 to 2016").
Deflation is when prices fall because the supply of goods is higher than the demand for those goods.
In the year 2009, The Great Recession just happened and people were struggling with money and
losing jobs. That explains

Essay on Economic Analysis of The U.S. 2001-2003
Economic Analysis of The U.S. 2001–2003
Economics have many indicators to describe how it runs. The indicators can show if the economy
has improved or declined. The economic indicators that will be focused on in this analysis of the
United States economy from 2001 – 2003 will be the consumer price index, the imports and exports,
the unemployment rate, and finally the gross domestic product. Now while most may know the
meanings of the previously stated indicators, for those who don't, they remain useless unless
defined. To begin with, these indicators will have to be defined in full to aid in understanding the
analysis in more detail. It will be after that that the actual analysis of the economy of the United ...
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Obviously unemployed rate is defined as "the fraction of the labor force that is unemployed" . To
define the unemployed is important as well, because it refers to those that have no job, but are
actively looking for work, not to those who are not working and are uninterested in searching or
getting a job . The reason that unemployment is so important in determining the economy's success
is because it is intertwined with the gross domestic product, as in when the gross domestic product
falls, unemployment is increased, and when it rises, there is a decrease in unemployment . To make
what is being explained clearer, when there is unemployment, production is down; therefore there is
less money and goods produced out of the economy. This is how unemployment relates as well.
The last indicator to be defined is probably the most the important of them all, and that is the gross
domestic product. The gross domestic product is defined as " the total market value of all the final
goods and services produced within an economy in a given year" . There are two types of gross
domestic product, real and nominal. Real GDP is adjusted to how prices have changed, as nominal
GDP is the current price as it is calculated . There is so very much that goes into the gross domestic
product that in this analysis only the percent change from the years will be shown as important. A
percent that is positive is obviously

Swot Analysis Of Zara
Zara is one of the most well–known international companies in the world. It is recognized for its
high fashion, quality garments and affordable prices. Zara's parent company is Inditex. "One of the
world's largest distribution groups" (Zara, n.d). Zara offers fashionable designs for men, women and
children. Zara was opened in A Coruña, Spain by Amancio Ortega and his partner Rosalia Mera in
1975. They wanted to name their store after their favorite film Zorba the Greek. Since that name was
already taken, they came up with a name that had similar letters. Zara was born and the brand
become a global phenomenon which is currently headquartered in Artexio, Spain. Their mission
statement indicates that customers come first in their business. ... Show more content on
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Through their use of vertical integration Zara is able to meet consumer demands in a short period of
time. This model describes their "fast– fashion" where they make the majority of the clothing in
Spain and Morocco. The garments are available in stores in just two weeks. Speed and efficiency
has helped Zara expand overseas and become a huge factor in their success. Zara's products are
available to consumers at their retail stores as well as online. The use of their vertical integration of
designs, just–in–time manufacturing, delivery and sales create flexible structure for low inventory
and quick response from consumers changing demands.
Today's fashion market is highly competitive and companies need to always be up to date. Zara has
many competitors such as H&M, Mango and Gap. The successful concept of "Fast fashion" has
created many retail stores to change their retail strategy but have not yet to compete with Zara
system. The United States of America is a diverse country located in North America bordered by the
Atlantic Ocean on the east and Pacific Ocean on the west. Its neighbor countries are Canada to the
north and Mexico to the south. United states currency is in US dollars. The United States is a
capitalist country. The position of president, as the head of the government, is currently held by
Donald J. Trump. The capital is in Washington D.C. The population in the United States in 2016 was
323,127,513 with

Inflation Is The Rise Of Priced Goods And The Fall Of...
ECON–50–16209 SU 2016 [ Erica Vergara, ID#0678025 ]
Essay 1:
Question 1: Inflation is the rise of priced goods and the fall in value of money. Deflation is when
prices of good and services fall. We are concerned about both because they can harm the economy.
In the video, "Inflation or Deflation?" by Merle Hazard, he asks if the banks will the central bank
get traction soon or will it lose its grip? In regards to being in a recession, Hazard is questioning if
the banks will be able to control what is happening or will it crash which happened in the Great
Depression. He also continues to describe how the government prints more money to compensate
for the prices which is inflation. Hazard also asks if the dollars in his mattress, will buy ... Show
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This can be caused by wage inflation.
Several people assume since deflation is the opposite of inflation it is better. However, deflation can
also harm the economy. A huge amount of unemployment is shown in deflation. An economic
deflation is an indication that this economy is diminishing. The United States experienced deflation
before. According to Kalen Smith, "Massive deflation helped turn a recession into the Great
Depression. As unemployment rose, demand for goods and services fell"
(http://www.moneycrashers.com/deflation–definition–causes–effects/). There are several factors that
cause deflation. Some factors are changes in structures of capital markets, decreased currency
supply, and decreased government or consumer spending. As a result, deflation can cause decreased
wages, decreased business revenues and reduced value in investments. Overall, deflation slows
down economic growth in economies.
The government regulates the economy to control inflation and deflation. By calculating the Gross
Domestic Product Deflator or Consumer Product Index, one can check for inflation. The Gross
Domestic Product Deflator compares the current level of prices to the level prices of the base year or
previous years. By using this, economists are able to calculate the inflation rate (text, p. 5–4b). This
is how

A Study of the Macroeconomic Indicators
Macroeconomic indicators The period from 2008 through today has been a highly difficult one, with
countries struggling to support their national economies, to reduce costs and guarantee the living
standards of their populations. At a general level, the recent years have manifested an economic
crisis of a gravity unwitnessed since the Great Depression of 1929–1933. At a more particular level
however, a deeper analysis would be conducted through the analysis of four economic indicators in
four important global economies. The four economic indicators are the gross domestic product
(GDP), the consumer price index (CPI), the unemployment rate and the interest rate, and the
countries are the United States of America, the United Kingdom, Canada and Japan. 1. Output and
growth For all of the four countries, the evolution of the gross domestic product throughout the past
recent period is similar. Having followed a relatively stable growth trend, all states were
dramatically impacted by the economic crisis in 2008. In the case of all United States, United
Kingdom, Japan and Canada, the effects of the internationalized economic crisis came to be felt in
2008. At the end of 2007, the crisis had already commenced, but it was too soon for the countries to
actually feel any real effects. Starting with 2008 however, all states registered decreases in their
national outputs, which culminated in the first half of 2009. After that point, the national economies
began to revive up until

Global Economy Research Paper
How does U.S. inflation affect the sale of goods domestically and globally?
How does United States inflation affect the sale of goods domestically and globally? The U.S.
economy has great impact locally as well as on the global front. With a population surpassing 318
million, a low unemployment rate, currency demands and other macroeconomic factors, their
influences on inflation are unparalleled. Labor rates and demand, prices of goods and services sold
within the United States and the stabilization of currency and its value are all affects domestically.
U.S. manufacturers exporting globally can also be significantly influenced by the power of inflation.
Major newsworthy events globally and domestic, relations and ease of doing business ... Show more
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Inflation and interest rates are often synonymous in the fact that one impacts the other. Interest rates
in the United States are determined based on three variables; time value of money, reimbursement
risk and power of inflation (What's the Relationship Between Inflation and Interest Rates?, 2009).
Essentially, the higher the inflation rate, the higher the interest rate. With inflation in the United
States remaining low, bank interest rates will keep currencies at a constant with minimal fluctuation
in value. This has both negative and positive effects on the economy. Borrowers (i.e. homebuyers,
students needing loans, etc.) benefit from this; whereas the investors are not making what they did
20 years ago when interest rates were profitable (Appendix

Consumer Good Are on the Rise
Consumer goods are on the rise and CPI going up 0.2% in March 2014. What is causing this rise?
According to the Bureau of Labor Statistics, "Increase in the shelter and foods cost accounted for
most of the rise." (CNNMoney) Everything from beef, milk, vegetables, medical care, clothing, and
airline fares are increased. Joel Naroff, president and chief economist, said "Today's report shows
that prices seem well contained, unless, of course you had to go out and buy food or heat your
house." (CNNMoney) Today I will discuss how consumer price index, inflation is affecting our
economy.
What is inflation? "Inflation is a increase in price levels over the progression of time." (Correcting
the Effects) In the article, inflation is occurring with the rise of price levels in consumer goods.
"When inflation is experienced, the purchasing power of a fixed sum of money decreases. Over long
time periods, this decrease in value become significant." (Correcting the Effects) For example, beef
prices the highest it has ever been since 1987 around $5.28 a lb. Coffee also on a 25 month high,
dairy products soaring high and half a gallon of milk with a .50$ increase. Forecast says, " It is
going remain high for the next several years". (CNNMoney) The government officially said "Food
inflation will likely rise 2.5 – 3.5 % this year. That is a huge increase compare to previous years.
Luckily, the one area we are not feeling the pain is at the gas pump. Gas is extremely important in
our everyday

Consumer Price Index
Consumer Price Index
EC 601 – Fall 2010
December 3, 2010
Consumer Price Index (CPI) According to Mankiw the Consumer Price Index is a measure of the
overall cost of the goods and services bought by a typical consumer. The Department of Labor's
subordinate branch the Bureau of Labor who is in charge of providing the Consumer Price Index of
states that the Consumer Price Index (CPI) is a measure of the average change over time in the
prices paid by urban consumers for a "market basket" of consumer goods and services. Some
background into how the Consumer Price Index came about. The Consumer Price Index was
initiated during World War I, when rapid increases in prices, particularly in shipbuilding centers,
made an index ... Show more content on Helpwriting.net ...
If a consumer buys one product over another because of a price hike in the first product, chain–
weighted figures will capture this buying shift, while Core CPI will not (Barnes, n.d.). Core CPI will
continue measuring the price of the good as it rises, regardless of whether fewer people are
purchasing the product (Barnes, n.d.). The CPI represents all goods and services purchased for
consumption by the reference population (U or W) BLS has classified all expenditure items into
more than 200 categories, arranged into eight major groups ("Consumer price index," 2010). Major
groups and examples of categories in each are as follows: FOOD AND BEVERAGES (breakfast
cereal, milk, coffee, chicken, wine, full service meals, snacks) HOUSING (rent of primary
residence, owners' equivalent rent, fuel oil, bedroom furniture) APPAREL (men's shirts and
sweaters, women's dresses, jewelry) TRANSPORTATION (new vehicles, airline fares, gasoline,
motor vehicle insurance) MEDICAL CARE (prescription drugs and medical supplies, physicians'
services, eyeglasses and eye care, hospital services) RECREATION (televisions, toys, pets and pet
products, sports equipment, admissions); EDUCATION AND COMMUNICATION (college tuition,
postage, telephone services, computer software and accessories); OTHER GOODS AND
SERVICES (tobacco and smoking products, haircuts and

Bureau Of Labor Statistics: Understanding The Consumer...
As the price of goods and services are constantly changing, it is important for us to understanding
the Consumer price Index. Consumer price index (CPI) is a measure of the weighted average change
over time in the purchase price of consumption by urban households for a set of goods and services.
The Bureau of Labor Statistics (BLS) has arranged all the expense items into eight major categories,
such as food and beverages, housing, apparel, transportation, medical care, recreation, education and
communication, along with other goods and services. The CPI is often referred as the cost–of–living
index, but it doesn't measure the exact data. There is no official result of cost–of–living index by the
government, so CPI is as close as it gets. ... Show more content on Helpwriting.net ...
It provides data about product value changes in the Nation's economy to government, business,
work, and private natives and is used by them as a guide for settling on monetary choices. Also, the
President, Congress, and the Federal Reserve Board use CPI to help define financial situations and
economic decisions. CPI can also escalate a particular dollar value with time and preserving buying
power of a given dollar value. Examples of series adjusted by the CPI include retail sales, hourly
and weekly wages, and components of the National Income and Product Accounts. So basically, as
product prices increase, the purchasing power of the consumer's dollar declines. Inflationary
problems occur when we experience unexpected inflation which is not unbalance with people's
incomes. If incomes do not increase along with the prices of goods, everyone's purchasing power
will be negatively affected, which can lead to a slower economy. While there are disadvantages to
inflation, many economists states that we actually need it to keep our economy moving forward. A
healthy rate of inflation will results in an increase of wages, profitability in businesses, and keeps
the capital flowing. An ideal rate of inflation is approximately 2–3% per year. The goal is for
inflation to outpace the growth of the underlying economy by a small amount per year. However, I
believe that if one thing increase in price, everything else will also increase. For example, when
minimum wage increase, the price of goods and services will eventually increase too. Which it will
resulting in a decrease of demand, and an increase in

Macroeconomic Indicator Of The Payroll Jobs
Macroeconomic indicator are an economic statistic which are often large statistics put out by private
companies, non–profit organization or various government agencies. Some of the common and vital
indicators such as Nonfarm payroll jobs, Unemployment rate report, Gross Domestic Product
(GDP), ISM report for manufacturing or the Consumer Confidence index, provide a measurement
for evaluating the health of the economy, current business cycles, or consumer spending. They are
released monthly or quarterly and can be leading or lagging. While it is important to keep up with
the pulse of the economy, many experts do not look through the all of the sections of indicators
because the data can change. The relative changes indicate how the economy ... Show more content
on Helpwriting.net ...
Government policy makers and economists utilize this data to assist with determining the current
state of the economy and predicting future economic activity. Most recent data on the nonfarm
payrolls shows that there were 142,000 new jobs added in the month of August 2014. This was a
sharp downward swing after the initial report for July stated an addition of 209,000 new jobs, but
this number was later revised to 212,000. A revision in June had an initial upswing of 10,000 in June
from 288,000 to 298,000. BLS later combined the data for June and July which resulted in a 28,000
decrease of jobs, however; the monthly jobs gain was 207,000 over the previous months. August
represented two occurrences for nonfarm payrolls:" smallest increase since December 2013" and the
addition of at least 200,000 payroll jobs in January. Private payrolls did not fare to well either as
there was a sharp drop with only an addition of 134,000 jobs in August after a gain of 213,000 in
July. This setback in payroll numbers would cause some to think that economic growth is
decreasing. There was a 0.2 percent increase in average hourly earnings for August after no growth
in July and the average weekly hour held steady at 34.5 hours with the previous two months.
Overall, the gains in payrolls and earnings resulted in aggregate earnings having a 0.4 percent
concrete increase. Traders, and all financial market experts monitor this report. The results of the
report can and

Inflation Indexing and its Macroeconomic Effects
Inflation Indexing and its Macroeconomic Effects
Inflation is often used to refer to an increase in overall price levels in an economy. Inflation is
represented in changes in the cost of living for households as well as production costs for
businesses. Thus, it is important to measure inflation accurately. There are a number of different
methods for measuring inflation, and as such, it is crucial that the measurements are factual and not
manipulated by governmental agencies for political gain.
Price measures
As stated above, there are a multitude of tools for measuring inflation, one of which is the Producer
Price Index (PPI). The PPI surveys a sample of manufacturers in order to measure the cost of a set
of goods and services bought by the firms (Mankiw, 2012). A rise in the producer price index can be
a precursor to rises in other indexes since manufacturers will pass on rising costs to consumers. An
accurate PPI is therefore particularly important because the PPI can help companies make informed
decisions about future contracts and necessary price changes (Cheolbeom, & Deockhyun, 2011).
Another option, known as the GDP deflator, uses the prices of everything produced in an economy
(weighted by how much of each of those things is produced), and the changes in value of those
items and services over a base period. In other words, the GDP deflator is used to measure the
difference in real GDP and Nominal GDP. It is an important indicator of economic conditions as it

Real Gross Domestic Product Of The United States And...
Real Gross Domestic Product
Real Gross Domestic Product is the measure of the economy's output of goods and services over a
specific period of time. It is usually measured in comparison to the GDP's of previous years. For
instance, if a year–to–year Gross Domestic Product goes up by 2 percent, it is said that the economy
has grown by 2 percent. On a more basic level, Gross Domestic Product can be measured by adding
everyone's earnings in a year or what everyone spent. This is known as the income approach and the
expenditure approach.
In 1942, Americas first Gross Domestic Product was published mainly for economic accountability.
At the time, the United States was in the midst of the Great Depression. It was called Gross National
Product, ... Show more content on Helpwriting.net ...
The unemployment rate was high in 2009 after the US Housing Bubble burst. Unemployment is
measured by sampling reports of staff on an employer's payroll. Another form of measure for
unemployment is through phone survey in which households are asked whether they are looking for
a job or working. This information helps the Bureau of Labor Statistics to complete the percentage
of unemployment. In order to be labeled unemployed, one must be looking for a job, laid–off
waiting to be recalled or out of work completely. The US government began documenting
unemployment in the 1950s. The highest rate of unemployment was after the great depression and
World War II.
The reason why I place unemployment second on the list of five economic factors is because it's an
indicator of the overall satisfaction or dissatisfaction of the American people. Unemployment drives
Gross Domestic Product and the economy because without employment there would be low
consumer spending, which is a key growth drive in the economy. Unemployment forces the
government to infuse money into the economy for unemployment benefits which could potential
lead to a recession.
Inflation
It is the rate of increase in the general price of good and services in an economy over a period of
time. Inflation reduces the purchasing power of currency because the higher the price of goods, the
more money would be needed to purchase it. For example if I purchase an item for $2, and the same
item sells for

Economics
| Assignment 2 | The Fiscal and Monetary Policy and Economic Fluctuations | | | 12/1/2013 |
|
An economy is the wealth and resources of a country or a region. Economy mainly refers to the
consumption of goods and services in a specific country or region. The United States of America is
known across the entire world as having the largest economy. The economy in the United States
today is now where near what it was many years ago. The current economic situation has the
country trying to regain its high economic status. The United States economy is really not good in
its current state, but somewhat better than it was five years ago. Many people are not aware of the
problem that we have in this country. I think that ... Show more content on Helpwriting.net ...
(www.latimes.com) In an effort to boost the drowning economy, the federal government determined
that the need was greater for the credit situation than the savings situation. (www.latimes.com)
According to an article in the L.A. times, corporate America has earned more today than they did at
the end of 2008. I think that inflation is a problem today for sure. The main problem with inflation
in the United States is the rising costs of rents and medical supplies and expenses. "Inflation is
sustained increases in the average prices of all goods and services." (O'sullivan) Today inflation has
caused increases. According to the report on the Consumer Price Index (CPI), consumer prices were
up 0.1% effective August 2013. (usinflationcalculator.com) The consumer price index measures
changes in the price level of a market or basically how much we as consumers pay for goods and
services in the United States. It is reported today that inflation is somewhat under control because
the rate is less than 4%. I think that the housing inflation was worse five years ago compared to
today. Consumers were losing houses due to unemployment and affordability. Many consumers had
home loans and interest rates that they really could not afford. The prices of housing were much
lower five years ago versus today. The prices of houses are higher now and people would need to

Consumer Price Inflation
First, we will examine price inflation under fiat currency and judge whether price inflation is
relatively stable under the U.S. dollar. Rolnick and Welser argued that under a fiat currency inflation
rates are high. Under their tests, fiat currency had an average inflation rate of 9.17%. Compared to
the average rate of inflation of 1.75% for commodity currencies. Thus, they concluded that under
fiat currencies rates of inflation were higher and unstable (Rolnick and Welser, 1997). However, I
believe further analysis is required. Examining the CPI and PPI index for the United States dollar
will help show that the rates of inflation under fiat currencies are not that high, as shown by Rolnick
and Welser's study. CPI stands for ... Show more content on Helpwriting.net ...
Second, the examination of the price of gold is necessary to see if a transition back to the gold
standard would help stabilize the U.S. dollar even more. To do this we will examine the price of
gold over a 10–year span and 5–year span. Some say, that commodity backed currency, like the gold
standard help stabilize inflation rates better than fiat currency. In theory, this is in large part due to
the fact that gold remains to be a stable fixed priced asset (Wolf, 2001). We will examine the price
of gold by looking at the highs and lows of the price of gold to determine if the price of gold
remains relatively stable over time. Looking at the 10–year graph of the price of gold, the highest
price gold was selling at was $1900.30 per ounce and it's lowest was $709.50 per ounce. Over the
past 5 years the high has been $1751.90 per ounce and the low has been $1050.60 per ounce (Kitco,
2017). Also it should be noted, that when examining the past 5–year graph for the price of gold, gold
has been on a sharp decline the past 5 years. This price fluctuation calls into question Rolnick and
Welser's findings in their study. If gold backed currency is supposed to stabilize price inflation,
shouldn't the price of gold also be stable? Data on the price of gold, shows that the price of gold
itself is not inherently stable. The recent fluctuations in gold pricing, does not call

The United States Economic Position Based On The Consumer...
This paper analyzes the published article report on the United States economic position based on the
consumer price index (CPI) and gross domestic product (GDP) of the American footprint. The
article however does state there are negative effects of the King Dollar – Low energy rate economy,
yet it signifies there is major gain to the American economy based on the high dollar effect or value
of currency. Some of the negative effects are to include depreciation of natural resources and high
energy costs in production. In adverse, a few positive effects of the High Dollar – low energy ratio
are to include a gain of profit and room for innovation to later encompass the ability to produce
more job establishments and opportunities. Keywords: ... Show more content on Helpwriting.net ...
As mentioned in the article, Larry Kudlow states the fact of how American consumers benefit from
increasing income while strengthening the purchasing freedom pressing many American firms to
become more competitive. The question presented is if the effect of the high dollar with low energy
net of the United States revenue is headed in a positive direction or rather placing the American
society in a possible dilemma in the near future.
As mentioned, exports are a major contributing factor to the United States, however so are the
accessibility of imports. Larry Kudlow (2015) mentions the gain of American business due to lower
cost imports. As a result, the higher the American dollar, outsourcing its competitors, the possibility
of ease for the nation to obtain imports from various countries at lower prices rather in the form of
currency or rather in the exchange of other goods and services. In comparison, the increase of the
dollar demands higher wagers for labor. The resulting factor allows consumers to purchase much
freely, in addition promoting a boost of the economy.
Government interface is highly demanded to ensure a nation's economy is able to prosper, recover or
sustain as a result to enable stability. Macroeconomics is exhibited in several ways when decisions
making skills are engaged to promote prosperity of a nation. For example, the analyzing of the CPI
and GDP to help determine a reasonable minimum wage whereas affecting all businesses and

Basics of Exchange Rates
BACK TO
BASICS
Why Exchange Rates?
Luis A.V. Catão
OW does one determine whether a currency is fundamentally undervalued or overvalued? this
question lies at the core of international economics, many trade disputes, and the new IMF
surveillance effort. George Soros had the answer once–in 1992–when he successfully bet $1 billion
against the pound sterling, in what turned out to be the beginning of a new era in large–scale
currency speculation. Under assault by Soros and other speculators, who believed that the pound
was overvalued, the British currency crashed, in turn forcing the United Kingdom's dramatic exit
from the european exchange Rate Mechanism (eRM), the precursor to the common european
currency, the euro, to which it never ... Show more content on Helpwriting.net ...
to do this, economists usually measure the real exchange rate in terms of a broad basket of goods.
Because the price of such a basket normally takes the form of an index number–such as the
consumer price index (CPI), which includes both goods and services–the ReR is also typically
expressed as an index that can be bench–
marked to any chosen time period. Going back to the dollareuro example, if an ReR index is 1.2,
the average consumer prices in europe are 20 percent higher than in the United States, relative to the
chosen benchmark. Indexes don't measure absolute prices (such as the price of the Big Mac), but
changes in overall prices relative to a base year (if, say, the index is 100 in the year 2000 and 120 in
2007, average prices are 20 percent higher than in 2000). In this case, if ReR indexes between
countries don't change over time, we say that relative PPP holds. ReR indexes between two
countries can be important. the massive U.S. trade deficit with China has become a political and
economic issue, and whether its roots are in a fundamentally misaligned exchange rate is a point of
contention. But, for the most part, economists and policymakers are more interested in the real
effective exchange rate (ReeR) when measuring a currency's overall alignment. the ReeR is an
average of the bilateral ReRs between the country and each of its trading partners, weighted by the
respective trade shares of each partner. Being an average, a country's ReeR may be in

Major Determinants of Interest Rates
Major Determinants of Interest Rates
Inflation
Inflation is a factor that decisively affects the nature or outcome of interest rates. "Inflation is an
increase in prices of goods and services over time"(Financial Institutions, Instruments and Markets,
2012). Inflation is the natural byproduct of a robust, growing economy. No inflation, or deflation
(the lowering of prices), is actually a much worse economic indicator. Also, in a healthy economy,
wages rise at the same rate as prices. A standard explanation for the cause of inflation is "too much
money chasing too few goods" This is also called the demand–pull theory. For several possible
reasons, more money is being spent than normal. This could be because interest rates are low and ...
Show more content on Helpwriting.net ...
In other words, the rate at which one currency can be exchanged for another" (Investopedia, 2012).
Exchange rates play a fundamental role in Australia's level of trade. Exchange rates are among the
most watched, analysed and governmentally manipulated economic measures, but exchange rates
matter on a smaller scale as well because an example being they impact the real return of an
investor's portfolio (Investopedia, 2012). Exchange rates and interest rates, as well as inflation, are
all interconnected. "Higher interest rates offer lenders, such as Australia's four big banks; ANZ,
NAB, Commonwealth and Westpac, a higher return compared to other countries...however lower
interest rates tend to decrease exchange rates" (Investopedia, 2012). Australia's exchange rates are
published daily except on public and bank holidays by the Reserve Bank of Australia (RBA). The
table below shows the exchange rates for the 13th, 14th and 17th of September 2012 (RBA website).
Units of foreign currency per A$ (Reserve Bank of Australia) | | 13th September 2012 | 14th
September 2012 | 17th September 2012 | United States Dollar | 1.0471 | 1.0579 | 1.0534 | European
Euro | 0.8102 | 0.8115 | 0.8022 | Chinese Renminbi | 6.6291 | 6.6835 | 6.6530 | Japanese Yen | 81.37 |
82.06 | 82.47 | United Kingdom Pound | 0.6498 | 0.6531 | 0.6493 | Indian Rupee | 58.07 | 57.85 |
56.75 | Thailand Baht | 32.48 | 32.55 | 32.43 |
|
'Interest

Brief Principles Of Macroeconmics By Gregory Mankiw
I. Introduction In economics, we learn that inflation is when the value of the dollar falls. Whereas,
deflation affects the value of the dollar by increasing its worth. Inflation and deflation should in all
actuality concern us all. Although, deflation in my book is more concerning than inflation. It is
important to understand cost of living in today economy. The cost of living is all one's expenses to
support one's self. One way to measure cost of living is by using the Consumer Price Index(CPI).
These are a few of the resources we use to understand today's economy.
II. Main Point Inflation can be bad for the economy. Inflation happen when there is a bigger money
suppy than there are goods and services. A shortage in goods and services leads to there prices going
up. In the text "Brief Principles of Macroeconmics" author Gregory Mankiw states that "some
economists argue that the costs of moderate inflation are not nearly as large as the public believes"
(Mankiw Chapter Intro). Why are people more afraid of inflation than deflation? It makes no since
to me. A moderate increase in prices have been proven over time to improve the economic stimuli.
III. Main Point ... Show more content on Helpwriting.net ...
Afterall, prices in the economy falling sounds very appealling, more so than prices increasing. When
our country experiences deflation many faceset of the economy come to a halt. People stop investing
there money in the economy. At first, profits will increase, however, they will eventually plummet.
Lastly, unemployment rates tend to go up during deflation. In the article "What Is Deflation" author
Kimberly Amadeo acknowledges that "to combat deflation, the Fed stimulates the economy with
expansionary monetary policy" Basically, the Fed increase the money supply faster then usally to
combat

Cost Of Living Adjustment. Students Name:. Institutional
Cost of Living Adjustment
Students Name:
Institutional Affiliation:
Cost of living refers to the cost of maintaining a specific standard of living. Cost of living is a
changing life–element over time and is normally interpreted in the form of cost of living index.
Calculations pertaining cost of living are used in making comparisons between varying standards of
living distributed within different geographic regions. Purchasing power parity rates provides a
suitable solution towards finding accurate differences in cost of living between different locations.
The purpose of COLA is to ensure that the purchasing power accorded by the social security and
supplementary security income (SSI) does not get scrapped off by the inflation ... Show more
content on Helpwriting.net ...
Most of pension benefits, employment contracts, and government entitlement are entitled to Cost of
Living Adjustments (COLA) clause which is responsible for increasing payments based on changes
in the cost–of–living index (CPI) (Whittaker and Wayne, 2016). COLA interferes with the payments
and is also tied to the cost–of–living–index that normally vary based on geographic location of the
employee (Whittaker and Wayne, 2016).
Consumer price index is a crucial entity that influences cost of living adjustment. It is responsible in
measuring the changes that occur in the price level of the market basket of both consumer goods and
services normally purchased by households (Mulvey & Gengler, 2014). Market basket refers to the
fixed list of items that is involved in tracking the progress of inflation in a given economy or
specific market. Market basket is also regarded as a commodity bundle. Consumer Price Index is
dependent of the fluctuations which occur in the prices of the goods specified and involved in
market basket (Mulvey & Gengler, 2014). These sample of goods and services are intelligently
selected from the market for accurate market judgements when measuring the consumer price index.
Normally, the goods involved in these judgmental practices are the frequently bought items and
household goods. Close observations are

Article Review: "U.S. Consumer Prices Held in Check in...
The economy has been turbulent over the last few years, to say the least. Nearly everyone has been
affected in one way or another. The article entitled "U.S. Consumer Prices Held in Check in
January" describes the current economic situation in the United States and even abroad. At one point
in time deflation was among the many concerns on everyone's mind, but the article states that
deflationary worries can now be a thing of the past. In fact, consumer prices are now on the rise
which can largely be tied to rising energy prices. There are many macroeconomic indices which are
touched upon in the article. The primary focus of the article is consumer price index (CPI), which
has increased $1.6% over the last twelve months (Hauser, 2011). In ... Show more content on
Helpwriting.net ...
The FED decided to carry out its bond purchasing program in August to help prevent deflation
(Hauser, 2011). The article could have turned out much differently if the FED did not step up and
take action. In addition the FED has the authority to adjust interest rates in accordance with the
current economic condition. Currently the FED is willing to curb inflation by adjusting the interest
rates at a moment's notice (Hauser, 2011). The FED's invisible hand can sometimes help prevent
major economic disasters.
The living standards around the world vary greatly. Productivity is directly linked to a country's
standard of living. Productivity is the quantity of goods and services produced from each unit of
labor input (Mankiw, 2008). Essentially, in countries where workers are more productive they
generally enjoy a higher standard of living and vice versa. Britain has a standard of living which is
very similar to that of the United States. Britain is currently suffering from economic hardships as
well. Britain's inflation rate hit four percent which is the highest level in two years. The rate of
inflation in Britain can be directly linked to increased prices for commodities (Hauser, 2011). It
seems that countries with higher living standards are better able to weather economic storms and can
cope with increasing prices better than struggling nations. The price of food and

The Duration Of Unemployment As Provided By The Bureau Of...
The duration of unemployment as provided by the Bureau of Labor Statistics was an average of 28.1
weeks in June. The trend seem to be improving overall because the average duration of
unemployment for May was 30.7 weeks, and a year ago it was 31.4 weeks (BLS 2015). The
difficulty of finding a job seems to go up after the first month after being unemployed. The people
who are unemployed for 15 to 26 weeks have the least trouble finding jobs (BLS 2015). After 27
weeks, more people have difficulty finding jobs (BLS 2015). A possible explanation is that
unemployed people look like worse candidates the longer they are unemployed, so they have a
harder time to find work as time goes on. Initially, people may also be discouraged from being laid
... Show more content on Helpwriting.net ...
Many organizations that lend money use this rate as a guideline for the "interest rates they charge
customers" (Streissguth 2011). To determine the prime rate, the Wall Street Journal first carries out
surveys of 30 large banks to determine the " 'consensus ' prime rate" (Streissguth 2011). The prime
rate is also determined in part by the federal funds rate, which is decided by the Federal Open
Market Committee (FOMC), so the prime rate normally changes when the federal funds rate
changes (Streissguth 2011). Generally, lenders will keep their total interest rates above the prime
rate (Streissguth 2011). According to Patrick Gillespie, the FOMC is likely to raise the federal funds
rate in September. He believes they are putting off raising rates due to low inflation along with the
rise of the dollar (Gillespie 2015).
Consumer Debt Consumer debt can be a good thing because it allows consumers to build credit so
that they have an easier time borrowing money. However, too much consumer debt is a bad thing
when consumers run out of money to make payments on their loans. Overall, consumer debt is
trending upwards. Economist Aimee Picchi says "new credit card debt will rise 5 percent in 2015".
Senior Economist Ivan Vidangos ' article "Deleveraging and Recent Trends in Household Debt"
shows that consumer credit has been growing since 2008, which has mainly been driven by "strong
growth in student loans and in auto loans". Household debt has also

United States Economic Analysis
To predict the State of the United States (US) Economy is a constant and complicated duty.
Professionals utilize economic indicators that may either confirm or predict long–term trends:
lagging and leading indicators, respectively. This paper will attempt to asses the State of the US
Economy as relatively strong by analyzing six comprehensive and representative economic
indicators: Consumer Price Index, Unemployment, Gross Domestic Product, the S&P 500, Existing
Home Sales, and Personal Income and Outlays. The first indicator of the economy to be analyzed is
that of the Consumer Price Index (CPI). This index is widely considered to be the benchmark
inflation guide to the US economy. Essentially, it compares a wide base of products from year to
year that are commonly bought and used by consumers on a daily basis. Because it can only gauge
the general trend of inflation and cannot inherently make any predictions, the CPI is considered to
be a lagging economic ... Show more content on Helpwriting.net ...
The official measure of unemployment is the U–3 index which is the percentage of the labor face
unemployed for fifteen weeks or longer. Because this indicator can only confirm the long–term
trend of unemployment it is considered a lagging indicator. In the most recent U–3 report, the
unemployment rate held steady at 5%. This figure is close to what is considered full employment by
economists (4.7% unemployment), and consequently bodes well for the overall economy. Moreover,
since the last economic downturn, the Great Recession, the unemployment rate has consistently
declined (from a peak of 10% in November 2009), indicating that the US economy is growing and
that more Americans are able to sustain themselves and thus pump more money back into the
economy with their expenditures. Therefore, the current unemployment figure is indicative of the
strong state of the

Supply and Demand Aggregate
Supply and Demand Economic Critique
Rachel Middlebrook
ECO/372
February 4, 2014
Rick Pretzsch
Supply and Demand Economic Critique
The United States economy is determined by a number of factors, such as; gross domestic product
(GDP), unemployment rates, consumer income, and interest rates. Everything the U.S. produces is
measured by the GDP. When the GDP turns negative, the economy can enter a recession. If this
negative GDP continues for years the country is considered in a depression. Supply and demand are
the forces drive the U.S. economy. Supply includes employment and natural resources such as oil.
Demand, or personal consumption, drives 70% of the economy. The current spiral of the United
States economy can be attributed ... Show more content on Helpwriting.net ...
The Consumer Confidence Index is watched by stock market analysts and investors to get an idea of
whether consumer spending will continue to drive the economy.
The U.S. is also facing income inequality, one–quarter of Americans make less than $10 per hour,
and this is income below poverty level. Many lower wage workers receive no health insurance,
pension plans, no sick or vacation days. Recent government tax policies have helped rich investors
more than the low wage earners. Technology and outsourcing has increased inequality. Emerging
markets of other countries are seeing increases in their income as they become more competitive in
the global marketplace. Overseas work forces are becoming more skilled and sophisticated in
managing their economy; as a result, wealth is shifting to those countries.
Interest rates control the flow of money in the economy. High interest rates curb inflation, but also
slow down the economy. Lower interest rates stimulate the economy, but could lead to inflation.
Americans must know whether rates are increasing or decreasing, and what other economic
indicators are saying. The target interest rate, or short–term interest rate is controlled by the Federal
Reserve. Long–term interest rates are market driven. The global average interest rate for long–term
debt is the result of global demand for credit compared to global supply of saving.
It doesn't seem clear if the country is still rising from its

Does Price Change Affect The Price Of Our Food?
When people think of oil, they think about the stuff you put in your car or what you use in food. Oil
is so much more than that. Oil is fuel, gas and energy that we use and need in life. So we ask, why
does the price of oil change so much and why does that price change affect the price of our food?
Oil has such a large demand because we are dependent on it for so many things like transporting
resources, running equipment, heating our houses, making our roads and many other things we use
on an everyday basis (Westhoff). I'm going to focus on why the price oil affects our food prices so
much. Well to start, the price of oil has changed dramatically over the past fifty years. Back in the
50's, 60's and even the early 70's the price of oil was fairly stable at $30/barrel. In 1980 the price of
oil reached the highest it's ever been yet at $120/barrel, then in 1998 it took a huge drop, falling
down to its lowest point since the 40's, just under $20/barrel. In 2008 it topped the record high from
1980 at $140/barrel. Now the price is back around its average at $55/barrel (Oil Price History and
Analysis/Crude Oil Prices 1969–2011). So why does it change so much, because oil is a natural
resource and the oil wells can be shutdown at any point in time. So say that a group of oil wells goes
dry for a period of time, the supply of the oil is going to be limited and the price of food will go up
because the oil companies will be charging more because they have less. It will cause a domino

Macro And Micro Of Sweden And United States
Macro and Micro of Sweden and United States
What is Macroeconomics? Macroeconomics is the part of economics study that looks at the
operation of a nation's economy as a whole (30). Macroeconomics main focus is the production and
consumption in an economy. Economists that specialize in macro investigate the effects of general
taxes such as income and sales taxes output and prices. They also study the causes of economic
upswings and downturn and the effects of monetary and fiscal point policy on economic wealth.
Macroeconomists also determine how interests are determined and why so economies grow faster
than others. (Economics)
What is Microeconomics? Microeconomics is part of economics study that looks at the behavior of
people and organizations in particular markets (30). Microeconomics concern is consumer decision–
making and utility maximization. They also look into firm production and profit maximization and
individual's equilibrium. Study the effects of government regulations on individual markets and
externalities along with other market side effects. (Economics)
The relationship between Macroeconomics and Microeconomics is the production and consumption
levels as the result of choice made by households and firms impact the country as a whole. For
example, how much we spend as individuals on products ultimately impacts how much we import in
order to spend to keep the economy regulating. If we are

Strong or Weak Dollar Is Better?
Strong or Weak Dollar is Better? Strong is good. Weak is bad. These generalizations sound simple
enough, but they can be very confusing when come to money. Is a "strong" U.S. dollar always good?
Is a "weak" dollar always bad? Understanding of it is a necessary in marketplace. The term such as
"Strong" and "weak" dollar is a "hot topic" which always bandied about by economist on a daily
basis and also public. This issue is so important to almost every one. It seems like part and parcel of
people who very concern about currency likes investors, economist, foreigners who study or
working in the United State and so on. What strong dollar and weak dollar mean? Strong dollar is
strong in compare to other foreign currency while weak ... Show more content on Helpwriting.net ...
) Hence, there is essentially a self–correcting mechanism in the foreign exchange market. A stronger
dollar basically leads to a weaker dollar while a weaker dollar eventually leads to a stronger one
through the implications of growth. Next, the United State firms find it harder to compete in foreign
market. When the US dollar strengthens, foreign trade partners will have to pay more euros and
pounds in order to make up for the appreciated dollar when they import from the Unites State. The
increase in dollar will eventually decline the demand as American made goods become less
attractive to buy at the consumer level in foreign country. This is because the United State has to
compete with lower price foreign goods. This slump in demand will ultimately translate into thinner
profit margins of manufacturers and producers in the United State, reducing expansion potential in
the country. The result in the longer term will be slower growth even as the United State consumers
up their near term standard of living. Besides, foreign tourists find it more expensive to visit the
United State. For example, I'm a Malaysian. If I wanted to exchange money to have a vacation at
either the United State of America or Australia, I have to compare the exchange rate. In the past,
exchange rate between Australia Dollars(AU) and Malaysia Ringgits(RM) was RM 2.8 per AU
while exchange rate between the United State

Measuring the Cost of Living
Chapter 24
Measuring the Cost of Living
Introduction
1931 – Year of Great Depression in the USA. But in spite of this fact some people contrived to earn
$80 000, it was famous baseball player Babe Ruth. Even the President Herberd Hoover had a lesser
salary of $75 000. When Ruth was asked if he thought it was right that his salary was higher than
President's he replied that he had a better year.
Year of 2007 describes a different picture. The average baseball player gets paid $4.8 million. We
consider the fact that the cost of living, products and services has grown in recent decades. But it
does not give us any explanation if Babe Ruth had a better standard of living than the average
baseball player now, because prices for goods ... Show more content on Helpwriting.net ...
For example one year pizza Margarita costs $10 and pizza Pepperoni costs $12, consumers will buy
more Margarita then Pepperoni. But the next year the price of pizza Margarita rises and Pepperoni's
price falls, in this way consumers will buy chipper pizza. But when computing CPI the number of
goods is fixed and in this way the index will show rise of the cost of living, but in reality the
increase is lower.
Introduction of new goods – since consumer have the variety of goods to buy every dollar becomes
more valuable. In reality introduction of new goods causes a decrease of the cost of living, but CPI
overstates real changes in the cost of living.
Unmeasured quality change – some types of goods and services improve their quality over time,
what increases its price. It is difficult to measure quality of the good or service that is why CPI is
overstated, because economists try to adjust the price to its quality.
The GDP Deflator versus the Consumer Price Index
Two measures of inflation – the GDP Deflator and CPI are usually move together, as it is shown on
the graph (http://www.ritholtz.com/blog/2008/08/variation–on–the–gdpinflation–chart/) below. The
GDP Deflator reflects goods and services produced within the country and CPI reflects goods and
services consumed within a country.
The CPI increases if price of any imported good rises, but it happens vice versa with GDP Deflator.
We can see it on the example of imported oil. When the price of oil raises the

Evaluation of Macroeconomic Performance in Australia and the US from 1990-2013

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