Economics for Business II
Day 9 – Some values (numbers)
Dr. Andrew L. H. Parkes
“A Macroeconomic Understanding for use in Business”
卜安吉
Growth in Prices
Inflation – 6.2% over the
past year to Aug.
 What is the effect on
wages?
 In the U.S., the minimum
wage rate is $7.25, what
was the real wage during
the past year at 6.2%
inflation?

,
OLD NUMBERS –
What are today’s?
http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html
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CPI and GDP deflator Historically
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Industrial Production

A monthly measure of the
economic growth goal
– Increased at 13.5% rate
last month was 14% y-o-y
OLD NUMBERS! From FALL – today’s????

,
Expectations are for
economic growth at about
8.4% (down from the first
half growth of 9.6%)
http://www.bloomberg.com/news/2011-09-09/china-s-stock-futures-rise-amid-obama-jobs-plan-easing-inflation-outlook.html
http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html
April 24, 2012
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Interest Rates
One year lending rate is
6.56%
One year deposit rate is
3.5%
The reserve requirement
is 21.0% for the largest
banks
,
http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html
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Yuan trades at what rate today?

See BB (Blackboard.com) for articles
we discuss!

Three Goals of any MACROECONOMY
– Full Employment – Unemployment Rate
– Economic Growth – REAL GDP
– Price Stability - CPI
– KNOW what real GDP and CPI mean
– On the Final Exam
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U. S. Real GDP 2005 - 2009
http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm
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U. S. Real GDP 2005 - 2009
http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm
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Personal Income & Spending
http://www.bea.gov/newsreleases/national/pi/pi_glance.htm
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Consumer Price Index 1999 - 2009
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Oil Prices 1990 to 2010
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Oil Prices during year 4/10 -11
http://www.bbc.co.uk/news/business/market_data/commodities/143908/twelve_month.stm
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Oil Prices during year 4/10 -11
http://www.bbc.co.uk/news/business/market_data/commodities/143908/twelve_month.stm
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Trade Balance in the U.S.
http://www.bea.gov/newsreleases/international/transactions/trans_glance.htm
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Trade Surplus
Also recently announced were the higher than
expected Chinese import and export numbers
for August.
However, the trade surplus was $17.76 billion,
lower than expected!
The median forecast was for $24.6 billion after a
gap of $31.5 billion in July!
http://www.bloomberg.com/news/2011-09-10/china-s-trade-surplus-in-august-reaches-17-76-billion-exports-rise-24-5-.html
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Chapter 23
U.S. Department of Labor
Bureau of Labor Statistics
http://www.bls.gov/cpi/
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Pay attention to the
definition of the CPI in
class! – “Urban Market Basket”
 What is the CPI in U.S.?
In China? - Assignment
 The Cost of Living is
measured by the CPI

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Cost of Living Adjustment
Four problems with using the CPI
for a Perfect measure of a COLA
1.
2.
3.
4.
Substitution Bias
Introduction of new goods
Unmeasured quality
changes
Typical Average Family
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Developed Countries Unemployment
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Geographic Distribution of Unemployment,
July 2009
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Problem Set 6: Inflation Basics
CPI and
GDP
deflator
 Some
basic ideas
and
concepts

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