宏觀(guān)經(jīng)濟(jì)學(xué)及財(cái)務(wù)知識(shí)分析規(guī)劃綜合課件

CHAPTER2MeasuringtheMacroeconomy1Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.CHAPTER2MeasuringtheMacroecQuestionsWhatkeydatadomacroeconomistslookat?Howarekeymacroeconomicdataestimatedandcalculated?Whatisthedifferencebetween“nominal”and“real”values?Howarestockmarketvaluesrelatedtointerestrates?2Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.QuestionsWhatkeydatadomacrQuestionsHowareinterestratesrelatedtothepricelevelandtheinflationrate?Howisunemploymentrelatedtototalproduction?Whatisright--andwhatiswrong--withthekeymeasureofeconomicactivity,realGDP?3Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.QuestionsHowareinterestrateTheImportanceofDataEconomistsusequantitativedatatoexamineandunderstandbehaviorpricesquantitiesvaluesDatacanbeusedintwowaysmakequantitativeforecaststesteconomictheories4Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheImportanceofDataEconomisMostImportantMacroeconomicDatarealGDPtheunemploymentratetheinflationratetheinterestratethelevelofthestockmarkettheexchangerate5Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.MostImportantMacroeconomicDTable2.1-TheSixKeyEconomicVariables6Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Table2.1-TheSixKeyEconomTheExchangeRateThenominalexchangerateistherelativepriceoftwodifferentcurrenciesdeterminedintheforeignexchangemarketExample?1.00equals$1.20$1.00equals?0.837Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateThenominaleTheExchangeRateDomesticexportersearnforeigncurrencywhentheyexportproductsneedtotradetheforeigncurrencyfordollarsForeignproducersearndollarswhenU.S.residentsimporttheirproductsneedtotradethedollarsforforeigncurrency8Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateDomesticexpoFigure2.1-TheMarketforForeignExchange9Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.1-TheMarketforFoTheExchangeRateTherealexchangerateisthenominalexchangerateadjustedforchangesinthevalueofthecurrencydependsonthenominalexchangerateandthepricelevel10Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTherealexchTheExchangeRateExample1nominalexchangeratechangesfrom$1.20=?1.00to$2.40=?1.00priceleveldoublesrealexchangerateisunchangedExample2nominalexchangerateremainsatthesamelevel($1.20=?1.00)priceleveldoublesrealexchangeratefallsbyhalf11Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateExample111CoTheExchangeRateExample3nominalexchangerateincreasesfrom$1.20=?1.00to$2.30=?1.00pricelevelremainsthesamerealexchangeratedoubles12Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateExample312CoTheExchangeRateTocalculatetherealexchangerate(),youneedthreepiecesofinformationpricelevelinthehomecountry(P)pricelevelabroad(P*)nominalexchangerate(e)13Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTocalculateTheExchangeRateTherearemanydifferentcurrenciesintheworldmanydifferentexchangeratesEconomistsconstructanexchangerateindextorepresent“the”exchangerateeachcountryreceivesaweightequaltoitsshareoftotalU.S.trade14Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTherearemanTheExchangeRateTheexchangerateindexisbyaveragingeachcountry’scurrentexchangeraterelativetoitsexchangerateinthebaseyear(1992)15Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTheexchangeFigure2.2-TheExchangeRateIndex,

1992-199816Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.2-TheExchangeRateTheStockMarketThemostrepresentativeindexoftheU.S.stockmarketistheStandardandPoor’sCompositeIndex(S&P500)ThemostcommonlydiscussedindexoftheU.S.stockmarketistheDow-JonesIndustrialAverage17Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketThemostrepreTheStockMarketStockmarketaveragesareinnominaltermsmustdividebysomemeasureofthepriceleveltogettherealvalueofthestockmarketTherealvalueofthestockmarketisasensitiveindicatoroftherelativeoptimismorpessimismofinvestorscanforecastfutureinvestmentspending18Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketStockmarketaTheStockMarketInvestorsfaceachoicebetweenholdingstocksandholdingbondsstocksaresharesofownershipofacorporationentitlesyoutoaportionofthecompany’sprofitsbondsaredebtsthatthecorporationowesyoupaysperiodicinterestpaymentsandreturnsprincipaltoyouatmaturity19Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorsfaceTheStockMarketRatesofreturnforbonds,therateofreturnistheinterestrate(r)forstocks,therateofreturnistheratioofearningspershare(Es)tothepricepaid(Ps)Stocksareriskyinvestorsmayrequireariskpremium(s)20Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketRatesofreturTheStockMarketInvestorswillholdonlystocksifInvestorswillholdonlybondsif21Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorswillTheStockMarketInvestorswillholdbothstocksandbondsifThismeansthatthevalueofastockisequalto22Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorswillTheStockMarketHowcanwemeasureEs?newspaperreportswhatthefirm’saccountantshavecalculated(Ea)investorsareinterestedinsomelong-runaverageofexpectedfutureearnings(Es)needanestimateoftherelationshipbetweenEaandEs23Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketHowcanwemeaFigure2.3-CalculatingtheValueofa

BasketofStocks24Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.3-CalculatingtheVTheStockMarketprovidesinformationonthecurrentlevelofprofits(earnings)whetherinvestorsareoptimisticorpessimisticthecurrentcostofcapitalattitudestowardrisk25Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketprovidesinforTheInterestRateisthepriceatwhichpurchasingpowercanbeshiftedfromthefutureintothepresentisnotasinglelumpsum,butanongoingstreamofpaymentsmadeovertimeisaflowvariable26Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInterestRateisthepriceTheInterestRateThereisalargenumberofdifferentinterestratesthatvarybyriskdurationtaxtreatmentPublishedinterestratesarenominalinterestrates27Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInterestRateThereisalaFigure2.4-TheRealversustheNominal

InterestRate28Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.4-TheRealversustThePriceLevelismostfrequentlymeasuredbytheConsumerPriceIndex(CPI)whichiscalculatedmonthlybytheBureauofLaborStatisticsisanexpenditure-weightedindex29Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ThePriceLevelismostfrequenTable2.5-CalculatingaPriceIndexforFruit:AnExample30Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Table2.5-CalculatingaPricTheConsumerPriceIndexPriceindexformula31Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexPriceTheConsumerPriceIndexInthebaseyear,thepriceindexwillequal10032Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexIntheTheConsumerPriceIndexInthesubsequentyear,thepriceindexwillequal13833Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexIntheKindsofIndexNumbersLaspeyresindexusesrelativeexpenditurelevelsinafixedbaseyearasweightsexample:ConsumerPriceIndexPaascheindexusescurrent,variableexpenditurelevelsasweightsexample:GDPdeflator34Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersLaspeyreKindsofIndexNumbersAllpriceindicesareimperfecttheLaspeyresindexoverstatestheeffectsofpriceincreasesbasedonafixedmarketbasketdoesnottakeintoaccountthatconsumerssubstituterelativelycheapergoodsforrelativelymoreexpensivegoodswhenpricesrise(substitutionbias)35Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersAllpricKindsofIndexNumbersAllpriceindicesareimperfectthePaascheindexunderstatestheeffectsofpriceincreasesdoestakeaccountofsubstitutiondoesnottakeintoaccountthefactthatsubstituteditemsareless-valuedthantheitemstheyreplace36Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersAllpricTheInflationRateisameasureoftherateofchangeinthepricelevelovertimeisaflowvariablecanbemeasuredusingdifferentpriceindicesConsumerPriceIndex(CPI)GDPdeflator37Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInflationRateisameasureFigure2.5-DifferentMeasuresofU.S.Inflation,1960-200038Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.5-DifferentMeasureTheUnemploymentRateisthefractionofpeoplewhowantajobarelookingforajobcannotfindajobiscalculatedusingtheCurrentPopulationSurveymonthlysurveybytheBureauofLaborStatistics39Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheUnemploymentRateisthefrTheUnemploymentRateIndividualsareclassifiedintooneoffourcategoriesthosewhoareemployedthosewhoareoutofthelaborforceanddonotwantajobcurrentlythosewhodowantajobcurrently,buthavegivenuplookingforonethosewhodowantajobandarecurrentlylookingforone40Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheUnemploymentRateIndividuaTheUnemploymentRate41Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheUnemploymentRate41CopyrigFigure2.6-TheU.S.UnemploymentRatesince195042Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.6-TheU.S.UnemployTheUnemploymentRateisastockvariablemayunderestimatetherealexperienceofunemploymentdiscouragedworkersworkerswhoarepart-timeforeconomicreasonsvarybydemographicgroup43Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheUnemploymentRateisastocFigure2.7-U.S.UnemploymentRatesbyDemographicGroup,1960-200044Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.7-U.S.UnemploymentOkun’sLawdescribestherelationshipbetweenunemploymentandoutputintheU.S.impliesthata1percentage-pointfallinunemploymentisassociatedwithanextra2.5percentagepointsofgrowthinrealGDP45Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Okun’sLawdescribestherelatiFigure2.8-Okun’sLaw46Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.8-Okun’sLaw46CopyrRealGDPiscalculatedbyaddingupthevalueofallfinalgoodsandservicesproducedintheeconomyisaflowvariableincludesfinalgoodsandservicespurchasedbyconsumersfirmsthegovernment47Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.RealGDPiscalculatedbyaddinNominalversusRealGDPNominalGDPmeasurescurrentoutputusingcurrent-yearpriceschangesinnominalGDPcanoccurfromchangesineitheroutputorpricesRealGDPmeasurescurrentoutputusingpricesfromabaseyearchangesinrealGDPcanonlyoccurifoutputchanges48Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.NominalversusRealGDPNominalNominalversusRealGDPExample49Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.NominalversusRealGDPExampleBaseYearNominalGDP=$10.00RealGDP=$10.00CurrentYearNominalGDP=$13.10RealGDP=$11.50NominalversusRealGDP50Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.BaseYearNominalversusRealGMoreonGDPIntermediategoodsaregoodssoldtoafirmforuseinfurtherproductionareexcludedfromGDPChangesininventoriesarecountedaspartofinvestmentImputationsaremadeforgoodsandservicesnotsoldthroughmarkets51Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.MoreonGDPIntermediategoods5ComponentsofRealGDP(Y)Consumption(C)Investment(I)residentialstructuresnon-residentialstructuresproducers’durableequipmentchangesinbusinessinventoriesGovernmentpurchases(G)Netexports(NX)52Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ComponentsofRealGDP(Y)ConsTable2.8-ComponentsofGDP,ThirdQuarterof200053Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Table2.8-ComponentsofGDP,WhatIsandIsNotinGDPIncludedinGDP(butshouldnotbe)replacementofworn-outorobsoletecapitalgovernmentpurchaseswhichcouldbecountedasintermediategoodsNotincludedinGDP(butshouldbe)householdproductiondepletionofscarcenaturalresources“bads”54Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.WhatIsandIsNotinGDPInclFigure2.9-LaborForceParticipationRates

byGender,1948-199655Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.9-LaborForcePartiChapterSummaryBecausegoodsandservicesareboughtandsoldwithpricesattached,economistshavealotofquantitativedatatoworkwithTherealexchangerateistherelativepriceatwhichtwocountries’goodsexchangeforeachothercalculatedbyadjustingthenominalexchangerateforchangesinthepricelevelsofthetwocountries56Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ChapterSummaryBecausegoodsaChapterSummaryThelevelofthestockmarketreflectsthevariableswhichaffectinvestmentcurrentprofitsinvestors’optimismorpessimismtherealrateofinterestattitudestowardriskTherealinterestrateiscalculatedbysubtractingtheinflationratefromnominalinterestsrates57Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ChapterSummaryThelevelofthChapterSummaryThemost-commonlyseenmeasureofthepricelevelistheConsumerPriceIndex(CPI)theinflationrateistherateofchangeintheCPIUnemploymentandoutputarelinkedthroughOkun’slawa1percentage-pointdecreaseintheunemploymentrateleadstoa2.5percentincreaseinoutput58Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ChapterSummaryThemost-commonChapterSummaryRealGDPisthemostcommonly-seenmeasureoftheoveralllevelofeconomicactivitycalculatedusingpricesfromabaseyearWhatisandwhatisnotincludedinGDPistheresultofeconomists’beliefsinthe1940sand1950saboutwhatwouldbepossibletomeasureeasily59Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ChapterSummaryRealGDPistheCHAPTER2MeasuringtheMacroeconomy60Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.CHAPTER2MeasuringtheMacroecQuestionsWhatkeydatadomacroeconomistslookat?Howarekeymacroeconomicdataestimatedandcalculated?Whatisthedifferencebetween“nominal”and“real”values?Howarestockmarketvaluesrelatedtointerestrates?61Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.QuestionsWhatkeydatadomacrQuestionsHowareinterestratesrelatedtothepricelevelandtheinflationrate?Howisunemploymentrelatedtototalproduction?Whatisright--andwhatiswrong--withthekeymeasureofeconomicactivity,realGDP?62Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.QuestionsHowareinterestrateTheImportanceofDataEconomistsusequantitativedatatoexamineandunderstandbehaviorpricesquantitiesvaluesDatacanbeusedintwowaysmakequantitativeforecaststesteconomictheories63Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheImportanceofDataEconomisMostImportantMacroeconomicDatarealGDPtheunemploymentratetheinflationratetheinterestratethelevelofthestockmarkettheexchangerate64Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.MostImportantMacroeconomicDTable2.1-TheSixKeyEconomicVariables65Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Table2.1-TheSixKeyEconomTheExchangeRateThenominalexchangerateistherelativepriceoftwodifferentcurrenciesdeterminedintheforeignexchangemarketExample?1.00equals$1.20$1.00equals?0.8366Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateThenominaleTheExchangeRateDomesticexportersearnforeigncurrencywhentheyexportproductsneedtotradetheforeigncurrencyfordollarsForeignproducersearndollarswhenU.S.residentsimporttheirproductsneedtotradethedollarsforforeigncurrency67Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateDomesticexpoFigure2.1-TheMarketforForeignExchange68Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.1-TheMarketforFoTheExchangeRateTherealexchangerateisthenominalexchangerateadjustedforchangesinthevalueofthecurrencydependsonthenominalexchangerateandthepricelevel69Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTherealexchTheExchangeRateExample1nominalexchangeratechangesfrom$1.20=?1.00to$2.40=?1.00priceleveldoublesrealexchangerateisunchangedExample2nominalexchangerateremainsatthesamelevel($1.20=?1.00)priceleveldoublesrealexchangeratefallsbyhalf70Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateExample111CoTheExchangeRateExample3nominalexchangerateincreasesfrom$1.20=?1.00to$2.30=?1.00pricelevelremainsthesamerealexchangeratedoubles71Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateExample312CoTheExchangeRateTocalculatetherealexchangerate(),youneedthreepiecesofinformationpricelevelinthehomecountry(P)pricelevelabroad(P*)nominalexchangerate(e)72Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTocalculateTheExchangeRateTherearemanydifferentcurrenciesintheworldmanydifferentexchangeratesEconomistsconstructanexchangerateindextorepresent“the”exchangerateeachcountryreceivesaweightequaltoitsshareoftotalU.S.trade73Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTherearemanTheExchangeRateTheexchangerateindexisbyaveragingeachcountry’scurrentexchangeraterelativetoitsexchangerateinthebaseyear(1992)74Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheExchangeRateTheexchangeFigure2.2-TheExchangeRateIndex,

1992-199875Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.2-TheExchangeRateTheStockMarketThemostrepresentativeindexoftheU.S.stockmarketistheStandardandPoor’sCompositeIndex(S&P500)ThemostcommonlydiscussedindexoftheU.S.stockmarketistheDow-JonesIndustrialAverage76Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketThemostrepreTheStockMarketStockmarketaveragesareinnominaltermsmustdividebysomemeasureofthepriceleveltogettherealvalueofthestockmarketTherealvalueofthestockmarketisasensitiveindicatoroftherelativeoptimismorpessimismofinvestorscanforecastfutureinvestmentspending77Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketStockmarketaTheStockMarketInvestorsfaceachoicebetweenholdingstocksandholdingbondsstocksaresharesofownershipofacorporationentitlesyoutoaportionofthecompany’sprofitsbondsaredebtsthatthecorporationowesyoupaysperiodicinterestpaymentsandreturnsprincipaltoyouatmaturity78Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorsfaceTheStockMarketRatesofreturnforbonds,therateofreturnistheinterestrate(r)forstocks,therateofreturnistheratioofearningspershare(Es)tothepricepaid(Ps)Stocksareriskyinvestorsmayrequireariskpremium(s)79Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketRatesofreturTheStockMarketInvestorswillholdonlystocksifInvestorswillholdonlybondsif80Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorswillTheStockMarketInvestorswillholdbothstocksandbondsifThismeansthatthevalueofastockisequalto81Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketInvestorswillTheStockMarketHowcanwemeasureEs?newspaperreportswhatthefirm’saccountantshavecalculated(Ea)investorsareinterestedinsomelong-runaverageofexpectedfutureearnings(Es)needanestimateoftherelationshipbetweenEaandEs82Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketHowcanwemeaFigure2.3-CalculatingtheValueofa

BasketofStocks83Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.3-CalculatingtheVTheStockMarketprovidesinformationonthecurrentlevelofprofits(earnings)whetherinvestorsareoptimisticorpessimisticthecurrentcostofcapitalattitudestowardrisk84Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheStockMarketprovidesinforTheInterestRateisthepriceatwhichpurchasingpowercanbeshiftedfromthefutureintothepresentisnotasinglelumpsum,butanongoingstreamofpaymentsmadeovertimeisaflowvariable85Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInterestRateisthepriceTheInterestRateThereisalargenumberofdifferentinterestratesthatvarybyriskdurationtaxtreatmentPublishedinterestratesarenominalinterestrates86Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInterestRateThereisalaFigure2.4-TheRealversustheNominal

InterestRate87Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.4-TheRealversustThePriceLevelismostfrequentlymeasuredbytheConsumerPriceIndex(CPI)whichiscalculatedmonthlybytheBureauofLaborStatisticsisanexpenditure-weightedindex88Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ThePriceLevelismostfrequenTable2.5-CalculatingaPriceIndexforFruit:AnExample89Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Table2.5-CalculatingaPricTheConsumerPriceIndexPriceindexformula90Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexPriceTheConsumerPriceIndexInthebaseyear,thepriceindexwillequal10091Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexIntheTheConsumerPriceIndexInthesubsequentyear,thepriceindexwillequal13892Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheConsumerPriceIndexIntheKindsofIndexNumbersLaspeyresindexusesrelativeexpenditurelevelsinafixedbaseyearasweightsexample:ConsumerPriceIndexPaascheindexusescurrent,variableexpenditurelevelsasweightsexample:GDPdeflator93Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersLaspeyreKindsofIndexNumbersAllpriceindicesareimperfecttheLaspeyresindexoverstatestheeffectsofpriceincreasesbasedonafixedmarketbasketdoesnottakeintoaccountthatconsumerssubstituterelativelycheapergoodsforrelativelymoreexpensivegoodswhenpricesrise(substitutionbias)94Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersAllpricKindsofIndexNumbersAllpriceindicesareimperfectthePaascheindexunderstatestheeffectsofpriceincreasesdoestakeaccountofsubstitutiondoesnottakeintoaccountthefactthatsubstituteditemsareless-valuedthantheitemstheyreplace95Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.KindsofIndexNumbersAllpricTheInflationRateisameasureoftherateofchangeinthepricelevelovertimeisaflowvariablecanbemeasuredusingdifferentpriceindicesConsumerPriceIndex(CPI)GDPdeflator96Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheInflationRateisameasureFigure2.5-DifferentMeasuresofU.S.Inflation,1960-200097Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Figure2.5-DifferentMeasureTheUnemploymentRateisthefractionofpeoplewhowantajobarelookingforajobcannotfindajobiscalculatedusingtheCurrentPopulationSurveymonthlysurveybytheBureauofLaborStatistics98Copyright?2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.TheUnemploymentRateisthefrTheUn