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How The CPI Is Used
1.
2.
The price stability
is one of the nation’s important macroeconomic goals
3.
Indexing a payment
makes up for any loss of purchasing power caused by inflation.
4.
In order
to compare economic values from different periods, we must translate nominal variables into real variables.
5.
6.
CPI Nominal Wage Real Wage 2010 100
15 15 2015 200 30 15
7.
8.
CPI Nominal Wage Real Wage 2010 100
15 15 2015 200 15 7.5
9.
10.
The end!
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