maam allen Lesson 4

Consumer price index

Refers to the weighted average of the prices of goods and services purchased by the typical consumer

example: isang “malaking basket” each year may tag iisang basket

Inflation

Refers to the increase in the overall price levels of an economy

Inflation Rate

The CPI’s growth rate

Deflation

Decrease in the overall price levels of an economy

Types of infation

1. Low inflation

2. Galloping inflation

3. Hyperinflation

4. Demand pull inflation

5. Cost push inflation

Low inflation

Gradual increases in prices that are predictable or expected ( 0% to 9% )

Galloping inflation

Prices are increasing rapidly but in periodic bursts ( 0% to 99% )

Hyper inflation

Continuous increase in the prices of goods and services ( 100% or higher )

Demand pull Inflation

Aggregate demand rising faster than potential output

Example: facemask nung pandemic

Cost push inflation

Inflation due to an increase in production cost

Example: tumaas presyo si raw materials or si machine

Expected inflation

IS INFLATION BAD?

_____ it can be good, sign daw ng pag unlad

Unexpected inflation

IS INFLATION BAD?

____ pag di prepared sa pag taas ng presyo, bad effect tohh both consumer and producer

Inflation rate computation FORMULA

(Later cpi - earlier cpi) /earlier cpi X 100%

Inflation rate computation

• if my tatlong year mag start ka sa pangalawa kasii need mo ng earlier cpi

• Nauulit talaga si earlier cpi

• % final answer sobrang important ng sign

• 2 decimal wag na daw mag round off