Author Question: In July 2014, the CPI inflation rate was 0.3 percent while the core CPI inflation rate was 0.1 ... (Read 53 times)

penguins · **on:** Jun 29, 2018

In July 2014, the CPI inflation rate was 0.3 percent while the core CPI inflation rate was 0.1 percent. The difference between these two measurements of inflation indicates

A) prices for food and fuel were increasing more rapidly than prices for other goods.
B) prices for food and fuel were increasing less rapidly than prices for other goods.
C) the underlying inflation rate was higher than the overall inflation rate.
D) a negative underlying inflation rate.

Question 2

List and explain the two phases and two turning points of the business cycle.

What will be an ideal response?

bassamabas · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

The economy is defined as being an expansion when real GDP is increasing and in a recession when real GDP decreases for at least two consecutive quarters. Between expansion and recession the economy reaches a peak defined as a local maximum in the level of real GDP. A trough is the opposite of a peak where real GDP hits a local minimum as the economy goes from being in a recession to being in an expansion.