Consumer prices in the US rose 1.4% in January compared to a year ago, showing signs of accelerating inflation. While rising costs for housing and healthcare were offset by lower oil prices, core inflation excluding food and energy rose 0.3% for the month and 2.2% over the last year. The Federal Reserve is monitoring inflation closely as it aims for a target of 2% annual inflation. While lower gas prices and a strong dollar have kept inflation down, housing costs continue to rise steadily. The report suggests inflation may be picking up gradually in line with the Fed's goals.

1. BUSINESS – SENIOR 5 – TERM 3 – DECEMBER 2016
A) What is the article about?Explainindetail what youknow about inflation.The “aimed”level of
inflation developedcountries look for, characteristic and pros and cons of high or low inflation.
Relate as many concepts as possible with the article.
Signs of Growing Inflation in ConsumerPrice Survey
WASHINGTON — Consumer prices in the United States were unchanged in January as the
rising costs of housing and health care were largely offset by cheaper oil.
But the annual pace of inflation showed signs of acceleration. The Labor Department said
Friday that prices rose 1.4 percent over the last 12 months, compared with a year ago, when
annual inflation was close to zero. Consumer prices climbed at the fastest annual rate since
October 2014.
Core inflation, which excludes the volatile energy and food costs, rose 0.3 percent in
January. Over the last 12 months, this category, which is closely watched by the Federal
Reserve, has climbed 2.2 percent.
The rising tempo for inflation follows a Fed decision in December to raise a crucial short-
term interest rate for the first time in nearly a decade. But the turmoil in the stock and
bond markets after the rate increase suggested to many investors that inflation might
barely budge in a slowing global economy.
…
The combination of a strong dollar and cheaper oil has suppressed inflation across much of
the economy.
Gasoline prices at the pump have dropped 24 percent over the last year to a national
average of $1.72 a gallon. At the same time, economic growth struggles worldwide have
pushed up the value of the dollar, making imports cheaper. But the rate at which gasoline
prices were declining slowed in January.
Housing expenses — which account for a third of the Consumer Price Index — have risen
3.2 percent from a year ago. Medical services are up 3.3 percent.
In January, prices also rose on a monthly basis for airfare, clothing and autos, while food
expenses were flat.
The Fed is closely following inflation, looking for assurance that it will accelerate to 2
percent in its preferred measure. That particular measure of personal consumption places
less emphasis on housing. It posted a modest annual increase of 0.6 percent in December.
…

2. B) This term we saw the movie “The Big Short”. Most, if not all the concepts that we worked with
this term appear in the movie.
How can you relate the followingtermswithwhathappensinthe movie.Write a kindof summary
of the movie including all these concepts.(Mortgages,subprime,rate, exponential growth, boom,
crisis, AAA, treasury bonds, swaps, MBS and CDO)