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State the Price level and time
We are rarely interested in the value of price level at a specific point in time. What we are interested in is percentage change in the price level between two points in time.
We calculate percentage change by first creating a basket of services and goods. At regular intervals (generally once a month on the first day of the month) we measure all prices of the contents of basket (mainly as an average of market) and calculate price level. In this manner, we will end up with a time series of price levels - one value for every month.
Explain, using the best framework you can think of (based on our class discussion), the effect of a large federal deficit on interest rates.
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OPEC oil cartel becomes subject to this tension or conflict such that the cartel gives way to a more competitive oil market resulting in a dramatic decrease in the world oil price.
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dynamic multipier
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