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MACROECONOMIC PROBLEMS (INFLATION (MEASURING INFLATION (CURRENT YEAR PRICE…
MACROECONOMIC PROBLEMS
INFLATION
A persistent and sustained increase in the aggregate or average price level of goods and services in the economy
MEASURING INFLATION
- CURRENT YEAR PRICE INDEX= (CURRENT YEAR PRICE/BASE YEAR PRICE) X 100%
- SIMPLE CONSUMER PRICE INDEX (CPI) = (CURRENT YEAR INDEX OF ALL ITEMS/ NUMBER OF ITEMS) X 100%
- WEIGHTED CPI= SUM OF ALL WEIGHTED PRICE INDEX/ TOTAL WEIGHTS
- INFLATION= [ (CPI CURRENT YEAR-CPI PREVIOUS YEAR) / CPI PREVIOUS YEAR ] X 100%
- REAL VALUE OF MONEY= ( BASE YEAR INDEX/ CURRENT YEAR CPI) X100%
- CHANGE IN VALUE OF MONEY= [ (BASE YEAR INDEX/ CURRENT YEAR CPI) -1 ] X100%
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UNEMPLOYMENT
Occurs when people who are in the working age group that are able and willing to work but are unable to find suitable jobs
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