Assignment on Inflation and Monetary Policy

Assignment 2 – Inflation and Monetary Policy

 

The Bureau of Labor Statistics (BLS) evaluates prices and generates the current CPI on a monthly basis. It then compares the current figure to last year’s index. The resulting percentage change between the two figures indicates the increase or decrease in inflation.

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Difference Between Inflation & CPI – Inflation-Linked.com (Links to an external site.)

 

Please watch this very brief (but very excellent) video on inflation –

http://www.theguardian.com/business/video/2015/dec/15/what-is-inflation-economics-explained-video (Links to an external site.)

 

Also for any additional information or references please only use websites i can access and or the text book of

Principles of Economics by OpenStax College

chapter 22 and 24

 

Now with this understanding and background please choose ONE of the following.  Your response should be 300-500 words long:

 

1) Identify several parties likely to be helped and hurt by inflation.

2) Do you think perfect indexing is possible? Why or why not?

3) The AD curve slopes negatively to the right because of three effects. Identify and discuss each of these effects.

 

 

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