1. Economics for Business II Day 11 – Some values (numbers) Dr. Andrew L. H. Parkes “A Macroeconomic Understanding for use in Business” 卜安吉

2. April 28, 2013BECO II, Day 112 Growth in Prices Inflation – 6.2% over the past year to Aug. Inflation – 6.2% over the past year to Aug. What is the effect on wages? What is the effect on wages? In the U.S., the minimum wage rate is $7.25, what was the real wage during the past year at 6.2% inflation? In the U.S., the minimum wage rate is $7.25, what was the real wage during the past year at 6.2% inflation?, http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html OLD NUMBERS – What are today’s?

3. April 28, 2013BECO II, Day 113 CPI and GDP deflator Historically

4. April 28, 2013BECO II, Day 114 Industrial Production A monthly measure of the economic growth goal A monthly measure of the economic growth goal –Increased at 13.5% rate last month was 14% y-o-y OLD NUMBERS! From FALL – today’s???? Expectations are for economic growth at about 8.4% (down from the first half growth of 9.6%) Expectations are for economic growth at about 8.4% (down from the first half growth of 9.6%), http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html http://www.bloomberg.com/news/2011-09-09/china-s-stock-futures-rise-amid-obama-jobs-plan-easing-inflation-outlook.html

5. April 28, 2013BECO II, Day 115 Interest Rates One year lending rate is 6.56% One year deposit rate is 3.5% The reserve requirement is 21.0% for the largest banks, http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html http://www.bloomberg.com/news/2011-09-11/china-strength-defies-hard-landing-scenario.html

6. April 28, 2013BECO II, Day 1166 Yuan trades at what rate today? See BB (Blackboard.com) for articles we discuss! See BB (Blackboard.com) for articles we discuss! Three Goals of any MACROECONOMY Three Goals of any MACROECONOMY –Full Employment – Unemployment Rate –Economic Growth – REAL GDP –Price Stability - CPI –KNOW what real GDP and CPI mean – On the Final Exam

7. April 28, 2013BECO II, Day 1177 U. S. Real GDP 2005 - 2009 http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm

8. April 28, 2013BECO II, Day 1188 U. S. Real GDP 2005 - 2009 http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm

9. April 28, 2013BECO II, Day 1199 Personal Income & Spending http://www.bea.gov/newsreleases/national/pi/pi_glance.htm

10. April 28, 2013BECO II, Day 111010 Consumer Price Index 1999 - 2009

11. April 28, 2013BECO II, Day 111111 Oil Prices 1990 to 2010

12. April 28, 2013BECO II, Day 111212 Oil Prices during year 4/10 -11 http://www.bbc.co.uk/news/business/market_data/commodities/143908/twelve_month.stm

13. April 28, 2013BECO II, Day 111313 Oil Prices during year 4/10 -11 http://www.bbc.co.uk/news/business/market_data/commodities/143908/twelve_month.stm

14. April 28, 2013BECO II, Day 111414 Trade Balance in the U.S. http://www.bea.gov/newsreleases/international/transactions/trans_glance.htm

15. April 28, 2013BECO II, Day 1115 Trade Surplus Also recently announced were the higher than expected Chinese import and export numbers for August. However, the trade surplus was $17.76 billion, lower than expected! The median forecast was for $24.6 billion after a gap of $31.5 billion in July! http://www.bloomberg.com/news/2011-09-10/china-s-trade-surplus-in-august-reaches-17-76-billion-exports-rise-24-5-.html

16. April 28, 2013BECO II, Day 111616 Chapter 23 Pay attention to the definition of the CPI in class! – “Urban Market Basket” Pay attention to the definition of the CPI in class! – “Urban Market Basket” What is the CPI in U.S.? In China? - Assignment What is the CPI in U.S.? In China? - Assignment The Cost of Living is measured by the CPI The Cost of Living is measured by the CPI U.S. Department of Labor Bureau of Labor Statistics http://www.bls.gov/cpi/

17. April 28, 2013BECO II, Day 111717 Cost of Living Adjustment 1. Substitution Bias 2. Introduction of new goods 3. Unmeasured quality changes 4. Typical Average Family Four problems with using the CPI for a Perfect measure of a COLA

18. April 28, 2013BECO II, Day 111818 Developed Countries Unemployment

19. April 28, 2013BECO II, Day 111919 Geographic Distribution of Unemployment, July 2009

20. April 28, 2013BECO II, Day 112020 Problem Set 6: Inflation Basics CPI and GDP deflator CPI and GDP deflator Some basic ideas and concepts Some basic ideas and concepts