Part 3 CPI, PPI and GDP deflator

Part 3 CPI, PPI and GDP deflator

Complete the following exercise:

One of the largest single influences on the level of interest rate is inflation. There are a number of sites that report inflation over time. Go to http://www.gpoaccess.gov/eop/ - the home page of the Economic Report of the President.

Select the following three tables: (a) Choose Table B–63.—Change in special consumer price indexes, (b) Table B–68.— Change in producer price indexes for finished goods; and (c) Table B–3. Quantity and price indexes for gross domestic product, and percent changes

• From the table B-63. Copy change in special consumer price indexes All Items Dec. to Dec. for 1970-- the most recent year into a separate spreadsheet.

• From the table B-68 Copy Change in producer price indexes for finished goods - Total finished goods - Dec. to Dec. for 1970 - the most recent year in to the same spreadsheet.

• From the table B-3 Copy Percent change from preceding period- Gross domestic product (GDP) - GDP implicit price deflator for 1970-- the most recent year in to the same spreadsheet.

• Plot these three series on the same graph. Present the tables and the graph in your report.

b) Write a report (1 page double - spaced), which contains the analysis of the results that you received.

In this paper consider, but do not be limited to the following:

How inflation is measured? What year had the lowest level of inflation? What year had the highest level of inflation?