Explain the relationship between the consumer price index and the inflation rate.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Question

Explain the relationship between the consumer price index and the inflation rate.

Explain what we can understand by expected inflation, inflation due to an increase in aggregate demand or inflation due to a decrease in aggregate supply.

Using the data in the table, integrate the expected relationship of the behavior of inflation with the phases of the economic cycle. You must use the different levels of inflation rate with economic growth and construct graphs to present your analysis arguments.

Datos de variables macroeconómicos seleccionados
Alos
fiscales CP inflación
Tasa de Tasa de
participación
2001 85.1 2.7
2002 84.3 -10
2003 85.8
19
2004 86.6 0.9
2005 902
41
2006 96.1 66
2007 002
42
2008 104.7 4.5
2009 076 2.8
2010 109.8 2.0
2011 1118
1.8
2012 114.7 2.6
2013 115.7 09
0.9
2014 116.8
2015 116.4
-0.3
2016 1162 0.2
2017 116.9 0.6
2018r 188
2019 119.4 0.5
45.4
45.8
46.6
46.5
47.0
48.6
46.6
45.5
41.7
40.9
40.3
39.6
40.0
40.1
40.1
40.6
Fuente: https://jp.pr.gov/Econom%C3%AD/A
Tasa de
desempleo
10.5
12.0
12.1
114
10.6
106
11.2
13.7
16.3
16.2
15.2
140
14.4
12.8
11.8
11.5
10.3
8.5
indice
Crecimiento en el
producto bruto (5)
A precios A precios
corrientes constantes
23
5.3
6.9
5.9
5.5
4.8
3.6
15
11
22
3.6
13
-0.2
12
0.6
-1.3
-48
1.5
-0.3
2.1
2.7
1.9
0.5
-12
-2.9
-3.6
-0.1
-1.8
-0.8
-1.6
-3.2
1.5
Transcribed Image Text:Datos de variables macroeconómicos seleccionados Alos fiscales CP inflación Tasa de Tasa de participación 2001 85.1 2.7 2002 84.3 -10 2003 85.8 19 2004 86.6 0.9 2005 902 41 2006 96.1 66 2007 002 42 2008 104.7 4.5 2009 076 2.8 2010 109.8 2.0 2011 1118 1.8 2012 114.7 2.6 2013 115.7 09 0.9 2014 116.8 2015 116.4 -0.3 2016 1162 0.2 2017 116.9 0.6 2018r 188 2019 119.4 0.5 45.4 45.8 46.6 46.5 47.0 48.6 46.6 45.5 41.7 40.9 40.3 39.6 40.0 40.1 40.1 40.6 Fuente: https://jp.pr.gov/Econom%C3%AD/A Tasa de desempleo 10.5 12.0 12.1 114 10.6 106 11.2 13.7 16.3 16.2 15.2 140 14.4 12.8 11.8 11.5 10.3 8.5 indice Crecimiento en el producto bruto (5) A precios A precios corrientes constantes 23 5.3 6.9 5.9 5.5 4.8 3.6 15 11 22 3.6 13 -0.2 12 0.6 -1.3 -48 1.5 -0.3 2.1 2.7 1.9 0.5 -12 -2.9 -3.6 -0.1 -1.8 -0.8 -1.6 -3.2 1.5
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Read through expert solutions to related follow-up questions below.
Follow-up Question

Use the graph(s) created in the previous question to contrast the effects and consequences of inflation and deflation in the short and long term.

 

(the question before was: 

Using the data in the table, integrate the expected relationship of the behavior of inflation with the phases of the economic cycle. You must use the different levels of inflation rate with economic growth and construct graphs to present your analysis arguments.)

 

Datos de variables macroeconómicos seleccionados
Alos
fiscales CP inflación
Tasa de Tasa de
participación
2001 85.1 2.7
2002 84.3 -10
2003 85.8
19
2004 86.6 0.9
2005 902
41
2006 96.1 66
2007 002
42
2008 104.7 4.5
2009 076 2.8
2010 109.8 2.0
2011 1118
1.8
2012 114.7 2.6
2013 115.7 09
0.9
2014 116.8
2015 116.4
-0.3
2016 1162 0.2
2017 116.9 0.6
2018r 188
2019 119.4 0.5
45.4
45.8
46.6
46.5
47.0
48.6
46.6
45.5
41.7
40.9
40.3
39.6
40.0
40.1
40.1
40.6
Fuente: https://jp.pr.gov/Econom%C3%AD/A
Tasa de
desempleo
10.5
12.0
12.1
114
10.6
106
11.2
13.7
16.3
16.2
15.2
140
14.4
12.8
11.8
11.5
10.3
8.5
indice
Crecimiento en el
producto bruto (5)
A precios A precios
corrientes constantes
23
5.3
6.9
5.9
5.5
4.8
3.6
15
11
22
3.6
13
-0.2
12
0.6
-1.3
-48
1.5
-0.3
2.1
2.7
1.9
0.5
-12
-2.9
-3.6
-0.1
-1.8
-0.8
-1.6
-3.2
1.5
Transcribed Image Text:Datos de variables macroeconómicos seleccionados Alos fiscales CP inflación Tasa de Tasa de participación 2001 85.1 2.7 2002 84.3 -10 2003 85.8 19 2004 86.6 0.9 2005 902 41 2006 96.1 66 2007 002 42 2008 104.7 4.5 2009 076 2.8 2010 109.8 2.0 2011 1118 1.8 2012 114.7 2.6 2013 115.7 09 0.9 2014 116.8 2015 116.4 -0.3 2016 1162 0.2 2017 116.9 0.6 2018r 188 2019 119.4 0.5 45.4 45.8 46.6 46.5 47.0 48.6 46.6 45.5 41.7 40.9 40.3 39.6 40.0 40.1 40.1 40.6 Fuente: https://jp.pr.gov/Econom%C3%AD/A Tasa de desempleo 10.5 12.0 12.1 114 10.6 106 11.2 13.7 16.3 16.2 15.2 140 14.4 12.8 11.8 11.5 10.3 8.5 indice Crecimiento en el producto bruto (5) A precios A precios corrientes constantes 23 5.3 6.9 5.9 5.5 4.8 3.6 15 11 22 3.6 13 -0.2 12 0.6 -1.3 -48 1.5 -0.3 2.1 2.7 1.9 0.5 -12 -2.9 -3.6 -0.1 -1.8 -0.8 -1.6 -3.2 1.5
Solution
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SEE SOLUTION
Follow-up Question

Using the data in the table, integrate the expected relationship of the behavior of inflation with the phases of the economic cycle. You must use the different levels of inflation rate with economic growth and construct graphs to present your analysis arguments.

Datos de variables macroeconómicos seleccionados
Alos
fiscales CP inflación
Tasa de Tasa de
participación
2001 85.1 2.7
2002 84.3 -10
2003 85.8
19
2004 86.6 0.9
2005 902
41
2006 96.1 66
2007 002
42
2008 104.7 4.5
2009 076 2.8
2010 109.8 2.0
2011 1118
1.8
2012 114.7 2.6
2013 115.7 09
0.9
2014 116.8
2015 116.4
-0.3
2016 1162 0.2
2017 116.9 0.6
2018r 188
2019 119.4 0.5
45.4
45.8
46.6
46.5
47.0
48.6
46.6
45.5
41.7
40.9
40.3
39.6
40.0
40.1
40.1
40.6
Fuente: https://jp.pr.gov/Econom%C3%AD/A
Tasa de
desempleo
10.5
12.0
12.1
114
10.6
106
11.2
13.7
16.3
16.2
15.2
140
14.4
12.8
11.8
11.5
10.3
8.5
indice
Crecimiento en el
producto bruto (5)
A precios A precios
corrientes constantes
23
5.3
6.9
5.9
5.5
4.8
3.6
15
11
22
3.6
13
-0.2
12
0.6
-1.3
-48
1.5
-0.3
2.1
2.7
1.9
0.5
-12
-2.9
-3.6
-0.1
-1.8
-0.8
-1.6
-3.2
1.5
Transcribed Image Text:Datos de variables macroeconómicos seleccionados Alos fiscales CP inflación Tasa de Tasa de participación 2001 85.1 2.7 2002 84.3 -10 2003 85.8 19 2004 86.6 0.9 2005 902 41 2006 96.1 66 2007 002 42 2008 104.7 4.5 2009 076 2.8 2010 109.8 2.0 2011 1118 1.8 2012 114.7 2.6 2013 115.7 09 0.9 2014 116.8 2015 116.4 -0.3 2016 1162 0.2 2017 116.9 0.6 2018r 188 2019 119.4 0.5 45.4 45.8 46.6 46.5 47.0 48.6 46.6 45.5 41.7 40.9 40.3 39.6 40.0 40.1 40.1 40.6 Fuente: https://jp.pr.gov/Econom%C3%AD/A Tasa de desempleo 10.5 12.0 12.1 114 10.6 106 11.2 13.7 16.3 16.2 15.2 140 14.4 12.8 11.8 11.5 10.3 8.5 indice Crecimiento en el producto bruto (5) A precios A precios corrientes constantes 23 5.3 6.9 5.9 5.5 4.8 3.6 15 11 22 3.6 13 -0.2 12 0.6 -1.3 -48 1.5 -0.3 2.1 2.7 1.9 0.5 -12 -2.9 -3.6 -0.1 -1.8 -0.8 -1.6 -3.2 1.5
Solution
Bartleby Expert
SEE SOLUTION
Follow-up Question

Explain what we can understand by expected inflation, inflation due to an increase in aggregate demand or inflation due to a decrease in aggregate supply.

Using the data in the table, integrate the expected relationship of the behavior of inflation with the phases of the economic cycle. You must use the different levels of inflation rate with economic growth and construct graphs to present your analysis arguments.

Solution
Bartleby Expert
SEE SOLUTION
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