Inflation and Analysis of Market Policies

Topic

Inflation and Analysis of Market Policies

Instructions

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. 

Answer preview

It is structural changes in the US economy’s macroeconomic framework that decreased inflation after 1995. These structural changes were the direct result of liberalization. In addition, other factors such as improved monetary policy, improved supply response, and the US government’s stressing on fiscal consolidation contributed to the decrease of inflation. The decline in inflation in the course of the late 1990s can also be attributed to excessive foreign capacity and increased globalization. Inflation hurts the consumer’s buying power, as he or she is compelled to pay more for products and services that he or she is accustomed to purchasing at stable prices. Inflation can assist an individual if he or she is experiences income inflation.

 

Word count: 719