AP Macroeconomics: Chapter 15 - Inflation & Unemployment

Who measures CPI and how often?

What does CPI measure?

What is the formula for CPI?

What is the formula to measure the inflation rates from one period to the next?

Is the CPI over or understated? Why?

What is the formula for the GDP deflator?

What is one notable difference between CPI and GDP deflator?

What are the four costs of inflation?

What is the Fisher's Hypothesis?

What are the two ways unemployment is calculated?

What are the five categories of unemployment?

What is the NAIRU?

What happens when unemployment goes under 4-6%?

2. If the CPI goes to 150 from 120, then prices have

FRQ Inflation exerts signifcant costs on the economy. Specifically, explain how inflation
I. causes a misallocation of resources