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Author Question: Why are changes in the Consumer Price Index (CPI) big news? a. Financial markets are extremely ... (Read 20 times)

sammy

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on: Jul 24, 2018
Why are changes in the Consumer Price Index (CPI) big news?
 a. Financial markets are extremely sensitive to changes in the rate of inflation.
  b. Change is what attracts attention and concern in the media, not the continuation of the status quo.
  c. The CPI is made up of many leading economic indicators and a change can represent a sign of an upcoming change in the economy.
  d. All of the above.

Question 2

Why is it important that economic indicators (such as the Consumer Price Index) be reported with seasonal adjustments?


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katkat_flores

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Reply #1 on: Jul 24, 2018
Answer to Question 1

D

Answer to Question 2

OTHERWISE, IT WOULD BE IMPOSSIBLE TO DETERMINE THE DIRECTION OF THE REAL TREND; FACTORS SUCH AS SEASON, HOLIDAYS, ETC COULD MASK THE UNDERLYING MOVEMENT OF THE SERIES.

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sammy

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Reply 2 on: Jul 24, 2018
Excellent

scottmt

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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