By the end of this section, you will be able to:

Use the Consumer Price Index (CPI) to calculate U.S. inflation rates
Identify several ways the Bureau of Labor Statistics avoids biases in the Consumer Price Index (CPI)
Differentiate among the Consumer Price Index (CPI), the Producer Price Index (PPI), the International Price Index, the Employment Cost Index, and the GDP deflator.

By the end of this section, you will be able to:

Explain the relationship between indexing and inflation
Identify three ways the government can control inflation through macroeconomic policy

By the end of this section, you will be able to:

Explain how inflation can cause redistributions of purchasing power
Identify ways inflation can blur the perception of supply and demand
Explain the economic benefits and challenges of inflation

By the end of this section, you will be able to:

Calculate the annual rate of inflation
Explain and use index numbers and base years when simplifying the total quantity spent over a year for products
Calculate inflation rates using index numbers

By the end of this section, you will be able to:

Define absolute advantage, comparative advantage, and opportunity costs
Explain the gains of trade created when a country specializes

By the end of this section, you will be able to:

Identify at least two advantages of intra-industry trading
Explain the relationship between economies of scale and intra-industry trade

By the end of this section, you will be able to:

Explain tarrifs as barriers to trade
Identify at least two benefits of reducing barriers to international trade

By the end of this section, you will be able to:

Show the relationship between production costs and comparative advantage
Identify situations of mutually beneficial trade
Identify trade benefits by considering opportunity costs

By the end of this section, you will be able to:

Predict shifts in the demand and supply curves of the labor market
Explain the impact of new technology on the demand and supply curves of the labor market
Explain price floors in the labor market such as minimum wage or a living wage

By the end of this section, you will be able to:

Identify the demanders and suppliers in a financial market
Explain how interest rates can affect supply and demand
Analyze the economic effects of U.S. debt in terms of domestic financial markets
Explain the role of price ceilings and usury laws in the U.S.

By the end of this section, you will be able to:

Apply demand and supply models to analyze prices and quantities
Explain the effects of price controls on the equilibrium of prices and quantities

By the end of this section, you will be able to:

Explain the meaning of trade balance and its implications for the foreign exchange market
Analyze concerns over international trade in goods and services and international flows of capital
Identify and evaluate market-oriented economic reforms

By the end of this section, you will be able to:

Identify the causes and effects of inflation in various economic markets
Explain the significance of a converging economy

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment