Inflation and measures

Question 1

Unemployment

Friction
Cyclical
Structural

Answer 1

1. Friction
   Employere have skills but cant find a job
2. Structural
   Employee DONT have skills but cant find a job
3. Cyclical

Question 2

Unemployment rate

Answer 2

Labor Force

Labor force = Employed + Unemployment (Seeking job)

Rate = Labor force
————————
Working Age pop.

Question 3

Demand - Pull

Cost - Push

Stagflation

Answer 3

1. Demand Pull
   Incentive by taxes decrease (i.e)

Increase Supply Money

Increase in Export

Increase Government purchases

2. Cost-Push
   Incentive by companies
3. Stagflation

Question 4

Leading indicator

Coincident Indicator

Laggin indicator

Answer 4

1. AVG weekly ours oin manufactiruing
   . Intial claim for insurance
   .Manufactros new orders
   . Ex-aircraft
   .S&P 500 index
2. COINCIDENT
   .Non farm-payroll, .Real personal income
3. LAGGING
   . Average Duration of unemployment
   . Commercial and industrial loan
   .Change in consumer price index

Question 5

Core inflation excludes

Answer 5

Food and Energy (Most volatile)

Question 6

Consumer Price index

CPI Biases

Laspeyres Index bias is…

Answer 6

Stage of processing are COMPONENTS

. Compare the current prices of a typical basket of prices in a base year

2. CPI BIASES
   - Overestimate ` 1%

• Quality improvement (Does not reflect in inflation
• new and more expensive goods and commodity
  REPLACING
  older and cheaper

3. LASPEYERES
   Overstate because
   Basket is fixed

Question 7

Credit Cycles tend to:

Answer 7

Amplify business cycles

Potential cause of price bubbles

Tend to be longer

Question 8

Hyper Inflation

Desinflation

Deflation

Answer 8

1. Pau torando pra cima
2. Decrease in inflation (Cenario BR dos ultimos tempos com o RCN),
3. Negative inflation