Part 2: The Inflation Rate (weight 30% of the assignment grade) Complete the fol
ID: 3051475 • Letter: P
Question
Part 2: The Inflation Rate (weight 30% of the assignment grade)
Complete the following exercise:
Visit the Bureau of Labor Statistics Web Site,
www.bls.gov/news.release/cpi.toc.htm . Select Consumer Price Index Summary.
Write a report (1-2 pages double - spaced) to answer the questions:
What month (and year) is summarized? What was CPI-U for that month?
What was the rate of inflation (percentage change in the CPI-U) for the month? How does that rate of inflation compare with the rate in the previous month?
Which two categories of goods or services had the greatest price increase for the month?
Which two categories of goods or services had the lowest price increase (or greatest price decrease) for the month?
Who loses from inflation?
Who benefits from inflation?
Explanation / Answer
1. What month (and year) is summarized? What was CPI-U for that month?
The month that is summarized in the data is December 2016. The CPU- U for the month of December in percentage change was 0.3% and the absolute data value of the change was 241.432
2. What was the rate of inflation (percentage change in the CPI-U) for the month? How does that rate of inflation compare with the rate in the previous month?
The inflation can be represented by the increase the price of the product across the country on in the duration of one month the change was of 0.3%. The rate was higher than in the month of November of the same year. In November the rate of inflation registered was only 0.2%.
3. Which two categories of goods or services had the greatest price increase for the month?
Fuel oil and Gasoline had the greatest price increase registered for the month.
4. Which two categories of goods or services had the lowest price increase (or greatest price decrease) for the month?
Used cars and trucks category and Food at home are the category that registered the lowest price increase.
5. Who loses from inflation?
Savers and the government bond holders lose in case of inflation.
6. Who benefits from inflation?
The treasury and the mortgage holders loses from inflation