1. Principles of Macroeconomics ECON 401
Dr. Andrew L. H. Parkes
“A Macroeconomic Understanding for use in Business”
卜安吉

2. Principles of Macroeconomics, Day 2
Chapter 2
NIPA Accounts – Income and Expenditures – real GDP, more next week
Growth rate calculations
The required textbook
Principles of Macroeconomics, Day 2

3. Principles of Macroeconomics, Day 2
Chapter 2 continued
Midterm Exam: Values of the indicators of the 3 Goals of Any Macroeconomy
For example: 6.3% for the CPI for China, 10.4% for GDP (today 4.9% CPI)
Problem Set #1 is on the webpage, download it and complete it for next class.
Federal Reserve did what?
Principles of Macroeconomics, Day 2

4. Principles of Macroeconomics, Day 2
Chapter 2
Pay attention to the definition of the CPI in class!
CPI in U.S. is what?
Cost of Living is measured by the CPI
U.S. Department of Labor Bureau of Labor Statistics
Principles of Macroeconomics, Day 2

5. SEE MY WEBSITE: andrewparkes.com
Four problems with using the CPI
for a Perfect measure of a COLA
Substitution Bias
Introduction of new goods
Unmeasured quality changes
Typical Average Family
Principles of Macroeconomics, Day 2