Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. CHAPTER 4 Where’s the Beef? Inflation, Real GDP, and Business Cycles

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

CHAPTER 4

Where’s the Beef? Inflation, Real GDP, and Business Cycles


Exhibit 4-1Inflation Rate: Weighted Average of PercentagePrice Changes


Exhibit 4-2Coverage Differences among the GDP Price Index,Consumer Price Index, and Producer Price Index


Exhibit 4-3U.S. Consumer Price Index Categories, 2006

Source: U.S. Department of Labor, Table 1, ‘‘Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, by Expenditure Category and Commodity and Service Group,’’ http://www.bls.gov/news.release/cpi.t01.htm (accessed October 27, 2006).


Exhibit 4-4England: Consumer Price Index, 1985–2005


Exhibit 4-5Measuring Compound Annual Inflation Rates


Exhibit 4-6Examples of Countries with Very High Inflation Rates, 1973–1991

Source: International Monetary Fund, The World Economic Outlook Database, http://www.imf.org/external/pubs/ft/weo/2000/02/data/pcpi_a.csv (accessed January 14, 2006).Bolded figures are annual inflation rates over 1,000% per year.


Exhibit 4-7Real versus Nominal GDP


Exhibit 4-8Real versus Nominal GDP


Exhibit 4-9Deriving the Price Index: Base Year = 2000


Exhibit 4-10Calculating Real GDP Using Nominal GDP andPrice Index


Exhibit 4-11U.S. Nominal GDP, GDP Price Index, and Real GDP, 1980–2005

Source: Bureau of Economic Analysis, National Economic Accounts, http://www.bea.gov/bea/dn/home/gdp.htm (accessed March 28, 2006).


Exhibit 4-12Recessions and Expansions During the Business Cycle


Exhibit 4-13Procyclical, Countercyclical, and Acyclical Macroeconomic Variables


Exhibit 4-14Leading Indicators Worldwide, May 30, 2006

Source: The Conference Board, http://www.conference-board.org (accessed May 30, 2006).


Exhibit 4-15U.S. Leading Economic Indicators

Source: The Conference Board, ‘‘Leading Economic Indicators and Related Composite Indexes,’’ http://www.conference-board.org/ (accessed January 21, 2006).


Exhibit 4-16U.S. Recessions and Movements in U.S. Real GDP:1947 (I) To 2006 (II)

Source: Data from Federal Reserve Bank of St. Louis, Economic Data—FRED, http://research.stlouisfed.org/fred2/series/GDPC1/downloaddata (accessed September 6, 2006).


Exhibit 4-17U.S. Business Cycle Expansions and Contractions: 1945–2006

Source: National Bureau of Economic Research, ‘‘Business Cycle Expansions and Contractions,’’http://www.nber.org/cycles/ (accessed September 6, 2006).


Exhibit 4-18Differences in Business Cycles: 1947–1982 versus1982–2006

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Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. CHAPTER 4 Where’s the Beef? Inflation, Real GDP, and Business Cycles