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Macroeconomics

Cumulative inflation with CPI

When working with CPI, we can calculate the cumulative inflation in a market with the following equation: Cumulative inflation % = CPI – 100 Cumulative … Read More

Okun’s Law

Okun’s Law is the relation of the Okun’s Gap % to the unemployment rate (U) and the natural rate of unemployment (Un). This can be … Read More

How to calculate CPI

Question: Calculate the CPI based on the following table. Survey Year Base Year This Year Px  $3 $4 $6 Py  $6 $8 $12 Qx  10 … Read More

What is CPI?

The Consumer Price Index (CPI) is an average price index of several hundred consumer goods and services. It details how the prices of these goods … Read More

Discouraged workers

A discouraged worker is someone who is eligible for employment and can work but has given up looking for work. They are not in the … Read More

Unemployment Rate

The total unemployment rate (U) in an economy is the sum of frictional unemployment (Uf), structural unemployment (Us), and cyclical unemployment (Uc). Therefore, we can … Read More

Cyclical

Cyclical unemployment is typically a direct result of the economy being bad. In other words, when the total output (Y) of the economy is less … Read More

Structural

Industries that have too many workers cannot employ all of them, thus, some will always be unemployed because they cannot differentiate themselves effectively in the … Read More

Frictional

Economically, frictional unemployment always occurs. It’s the nature of any economy and the “friction” that occurs in job placement. Frictional unemployment is usually around 3% … Read More