Calculating The Inflation Rate:
-The test next week is about unemployment, Gross Domestic Product (GDP) and inflation. How do we measure? What is the weakness? Multiple choice...
-How we measure the Consumer Price Index (CPI)? Inflation isn´t a perfect measure. Weakness; basket is fixed.
-Fixed basket= Basket doesn´t change! One of the thing became much more expensive. Something goes up in price you may buy something else. Fixed basket; you can´t do that because it reflexes a higher price. New product bias VS outlet bias. Amazon has different prices than general retail stores! Nominal VS real Gross Domestic Product (GDP). Cheaper stuff early on! Compare apple to apples; Dollars are deflating; read "What Has Government Done To Our Money?" by Murray #Rothbard