1 / 24

CPI continued

CPI continued. Or … Cost of Living index continued. Graphing. Let’s say you make $100 every year for 10 years. Non Constant Dollar Graph. Non Constant vs. Constant Dollar.

denise
Download Presentation

CPI continued

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. CPI continued Or … Cost of Living index continued

  2. Graphing Let’s say you make $100 every year for 10 years.

  3. Non Constant Dollar Graph

  4. Non Constant vs. Constant Dollar • Since the value of the dollar decreased each year, this graph is not a realistic depiction of your salary over this period. • Nominal cost or Non constant dollar cost is represented • Constant dollar cost is not represented

  5. Creating the Spreadsheet • Let’s say inflation brought the cost of living up 3% each year. • Is your $100 increasing or decreasing in value?

  6. Creating the Spreadsheet • How might you represent the 3% inflation on the excel spreadsheet?

  7. Creating the Spreadsheet Nice! We know that our $100 is decreasing in value, but can we see by how much?

  8. To Constant Dollar 2010 Salary • To translate what our 2000 salary would be if it were transported to 2010…. • To see the relative salary in 2000 in terms of 2010dollars….

  9. What if? • You got a 1% raise? • Non – Constant Dollar graph?

  10. 2010 Constant Dollar Graph?

  11. What if? • You got a 3% raise? • Non – Constant Dollar Graph? • Constant Dollar Graph?

  12. What if? • 4% raise? • Non – Constant Dollar Graph? • Constant Dollar Graph?

  13. Graphing Has electricity become more expensive?

  14. Problem???

  15. To Constant Dollar 1997 Price • To translate what our 1986 Price would be if it were transported to 1997…. • To see the relative expense of electricity in 1986 in terms of 1997 dollars….

  16. Better

  17. Scenario for Electricity • We saw what the graph looked like when the constant dollar price of Electricity went down relative to the cost of inflation. • What would the constant dollar graph look like if electricity increased at the same rate as inflation?

More Related