Lessons: Chapter 9 - Government Information & Actions that Affect the Market


Important Links

LInk to Investopedia Video/Article on the Consumer Price Index:  CPI

Historical Consumer Price Index data since 1913: Historical CPI

US Government's page showing links to annual Consumer Price Index reports: US Government CPI Site

On page above, Nov. 2016 CPI report link is here: Nov. 2016 CPI Report (See Table #24) 

Inflation rates from around the world: Inflation from Around World

US Gross Domestic Product: GDP

US Labor Statistics: Employment Rates


Assignments

9.1: Which of the following can best describe the meaning of inflation:

  1. The increase in the price of stock

  2. The extent to which your money today can buy less in the future

  3. The extent to which a company can increase its profit

9.2: Which one of the following is most likely not to cause temporary of long-lasting inflation in prices of goods:

  1. When more people want a particular product such as red roses for Valentines Day

  2. When companies raise prices due to the increase in prices of the materials they use to make their products

  3. When a lot of stores close due to lack of customers because of a bad economy

  4. When there are shortages of particular goods such as gasoline for your car in the aftermath of a devastating hurricane

9.3: What is the most prominent index in the United States used to gauge inflation?

  1. The Consumer Price Index for All Urban Consumers (CPI-U)

  2. The Dow Jones Industrial Average

  3. The S&P 500

9.4: Give a reason why very low inflation is not a good thing for the economy.

9.5: Give a reason why very high inflation is not a good thing for the economy.

9.6: Which of the items below best describes Gross Domestic Product(GDP)

  1. The rate of increase in the S&P 500 stock index 

  2. The dollar value of what the national economy produced during a certain period of time

  3. The amount of money spent by the government on defense

9.7: Which of the items below contributes more to Gross Domestic Product than all the others?

  1. How much you, your family, and other citizens spend on food, clothing, services, and other items.

  2. The money businesses spend to buy equipment for their factories, the money families spend to buy homes, and the change in certain items on the balance sheets of companies.

  3. The money spent by the government for defense, roads, schools, and other items.

  4. The amount of goods and services the United States sells to other countries.

9.8: Explain why a very fast growing GDP can be bad for the economy. Hint: Inflation

9.9: The Labor Force or Workforce is described most accurately by which of the following:

  1. The number of people employed

  2. The number of people unemployed who are actively seeking work

  3. The number of people employed and unemployed who are actively seeking work

  4. The number of people unemployed who are actively seeking work

9.10: The unemployment rate can best be described as:

  1. The percentage of the labor force that is out of work

  2. The percentage of the labor force that is working

  3. The percentage of the US population out of work who are not actively seeking employment

9.11: Which of the following items is the tool the Federal Reserve Bank uses to stop the economy from overheating or encourage the economy to grow:

  1. By changing the discount rate

  2. By engaging in more advertising to affect consumer behavior

  3. By printing more or less money

 

> Answers to Chapter 9 Assignments