Inflation and Analyses of Monetary Policies

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Economics

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Purpose of Assignment

This assignment will introduce students to the U.S. Department of Labor's Bureau of Labor Statistics (BLS) data and provide students with the skills to calculate inflation and interpret the Consumer Price Index (CPI). Note: The BLS is the primary source of information on inflation, but their data is re-posted in other sources, such as the St. Louis Federal Reserve FRED site, among others.

Assignment Steps

Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Use an internet search or the University Library to locate information on the Consumer Price Index (CPI). Internet sites you might find useful include the Bureau of Labor Statistics (BLS) and the Federal Reserve of St. Louis FRED web site although you are allowed to use other sources.

Develop a minimum 700-word analysis of inflation by including the following:

  • Choose a product or service you currently consume/use, such as apparel or educational services, that is included in the CPI's "market basket." Find the annual CPI index numbers for your chosen good or service for the years 1995, 2005, 2010, and 2015. Enter those index numbers in an Excel® file and calculate the percent change (inflation rates) in those index numbers from 1995 to 2005, from 1995 to 2010, and from 1995 to 2015.
  • Analyze the trends in overall inflation over the last five years and whether your income has kept pace with inflation. How has inflation over the last five years affected you and/or your family?
  • Discuss how a business manager, such as a human resources manager, might use CPI statistics.

Cite a minimum of three scholarly, peer-reviewed references.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

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Inflation and Analyses of Monetary Policies Grading Guide ECO/561 Version 12 Economics Copyright Copyright © 2017 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Inflation and Analyses of Monetary Policies Grading Guide ECO/561 Version 12 Edited in accordance with University of Phoenix® editorial standards and practices. 2 Inflation and Analyses of Monetary Policies Grading Guide ECO/561 Version 12 Individual Assignment: Inflation and Analyses of Monetary Policies Purpose of Assignment This assignment will introduce students to the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) data and provide students with the skills to calculate inflation and interpret the Consumer Price Index (CPI). Note: The BLS is the primary source of information on inflation, but their data is re-posted in other sources, such as the St. Louis Federal Reserve FRED site, among others. Resources Required Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products. Grading Guide Content Met Partially Met Not Met Total Available Total Earned 4 #/4 Chose a product or service student currently consumes/uses, such as apparel or educational services, that is included in the CPI’s “market basket.” Found the annual CPI index numbers for student’s chosen good or service for the years 1995, 2005, 2010, and 2015. Entered those index numbers in an Excel® file and calculated the percent change (inflation rates) in those index numbers from 1995 to 2005, from 1995 to 2010, and from 1995 to 2015. Analyzed the trends in overall inflation over the last five years and whether student’s income has kept pace with inflation. Answered the following question: • How has inflation over the last five years affected you and/or your family? Discussed how a business manager, such as a human resources manager, might use CPI statistics. Cited a minimum of three scholarly, peerreviewed references. The analysis is a minimum of 700 words in length. Comments: 3 Inflation and Analyses of Monetary Policies Grading Guide ECO/561 Version 12 Writing Guidelines Met Partially Met Not Met Total Available Total Earned 1 #/1 5 #/5 The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total Additional comments: # Comments: 4
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Explanation & Answer

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Outline
Inflation and Analyses of Monetary Policies
Inflation is explained as the rate at which the general price levels for goods and services
increase gradually while the buying power of money reduces. It can also be explained as the
steady fall in the purchasing power of money. Inflation has severe impacts and thus it is not a
new issue for many people.
The trend in the overall inflation
From the table above, it is evident that the inflation rate increased to the highest level
from 2010 to 2015 compared to the other years. For the last five years, the inflation rate has
increased from one financial year to the other in a constant way.
Additionally, the level of income has not been changing at the same rate as the rate of
inflation.
The impact of inflation
In general, inflation has more negative effects as compared to the positive effects. The
primary reason is that the purchasing power has steadily been decreasing with money value
going down too. Because of this reason, the family expenditure has been reduced with the same
margin while the income level has been changing with a small percentage which can be
neglected.
How business managers can use CPI statistics

The CPI statistics are essential and important in describing the trend in the inflation rates
within the economy either domestically or internationally. For business managers, they can make
use of ...


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