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雷达卡
I’d like to share some differences and similarities between GDP and CPI. It’s a kind of new idea... as well as review of my majors. GOOD ESSAY. SHARE TO U ALL!
GDP: MEASURING A NATION’S INCOME
The total expenditure in the economy must equal the total income in the economy. GDP is the market value of all final goods and services in a given period of time. There are four components of GDP: consumption, investment, government purchases and net exports.
CPI: MEASURING THE COST OF LIVING
The consumer price index shows the cost of a basketball of goods and services relative to the cost of the same basket in the base year. The index is used to measure the overall level of prices in the economy.
Similarities: “They usually move together. BUT GDP excludes the value of leisure and the value of a clean environment.” And the percentage change in the consumer price index measures the inflation rate, but it overstates true inflation.
Differences: “Imported goods affect the CPI but not the GDP deflator.” Hah, how peaceful it’ll be if Donald Trump, the donkey’s butt can realize it.
“While the CPI uses a fixed basket of goods, the GDP deflator automatically changes the groups of goods and services over time as the composition of GDP changes.” The real interest rate equals the nominal interest rate minus the rate of inflation.
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