Economics for Business II Day 11 – Some values (numbers) Dr. Andrew L. H. Parkes “A Macroeconomic Understanding for use in Business” 卜安吉

April 28, 2013BECO II, Day 112 Growth in Prices Inflation – 6.2% over the past year to Aug. Inflation – 6.2% over the past year to Aug. What is the effect on wages? 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? 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?

April 28, 2013BECO II, Day 113 CPI and GDP deflator Historically

April 28, 2013BECO II, Day 114 Industrial Production A monthly measure of the economic growth goal 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%) Expectations are for economic growth at about 8.4% (down from the first half growth of 9.6%),

April 28, 2013BECO II, Day 115 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,

April 28, 2013BECO II, Day 1166 Yuan trades at what rate today? See BB (Blackboard.com) for articles we discuss! See BB (Blackboard.com) for articles we discuss! Three Goals of any MACROECONOMY 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

April 28, 2013BECO II, Day 1177 U. S. Real GDP

April 28, 2013BECO II, Day 1188 U. S. Real GDP

April 28, 2013BECO II, Day 1199 Personal Income & Spending

April 28, 2013BECO II, Day Consumer Price Index

April 28, 2013BECO II, Day Oil Prices 1990 to 2010

April 28, 2013BECO II, Day Oil Prices during year 4/

April 28, 2013BECO II, Day Oil Prices during year 4/

April 28, 2013BECO II, Day Trade Balance in the U.S.

April 28, 2013BECO II, Day 1115 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!

April 28, 2013BECO II, Day Chapter 23 Pay attention to the definition of the CPI in class! – “Urban Market Basket” Pay attention to the definition of the CPI in class! – “Urban Market Basket” What is the CPI in U.S.? In China? - Assignment What is the CPI in U.S.? In China? - Assignment The Cost of Living is measured by the CPI The Cost of Living is measured by the CPI U.S. Department of Labor Bureau of Labor Statistics

April 28, 2013BECO II, Day Cost of Living Adjustment 1. Substitution Bias 2. Introduction of new goods 3. Unmeasured quality changes 4. Typical Average Family Four problems with using the CPI for a Perfect measure of a COLA

April 28, 2013BECO II, Day Developed Countries Unemployment

April 28, 2013BECO II, Day Geographic Distribution of Unemployment, July 2009

April 28, 2013BECO II, Day Problem Set 6: Inflation Basics CPI and GDP deflator CPI and GDP deflator Some basic ideas and concepts Some basic ideas and concepts