Econ 1: September 24

Bellwork: Pg. 19

1. List the 7 economic/social goals of the United States (p. 44-45 in the textbook).
2. The Americans with Disabilities Act provides all people with the accommodations they need to have access to the same spaces and opportunities as abled bodied people (EX: all public buildings need ramps and/or elevators). Which economic/social goal would this fall into?
3. Throughout our lifetime, we will pay into the Social Security program. When you retire (or in the case that you cannot work due to illness or disability), the government will send you a small amount of money each month to help support you. Which economic goal does this fall into?

Inflation Questions: Pg. 20

Directions: Read p. 361-367 in your textbook. Write your answers to these questions in complete sentences on p. 20 in your notebook.

1. Define: inflation
2. Define: deflation
3. What is the Consumer Price Index? What is it used for?
4. What role does the market basket play in calculating the consumer price index (CPI)?
5. Answer the question in Figure 13.3 (p. 362): How do we interpret a CPI of 163.2?
6. How is the CPI used to compute inflation?
7. There are four causes of inflation. Describe each in 2-3 sentences.
   1. Demand-Pull:
   2. Cost-Push
   3. Wage-Price Spiral:
   4. Excessive Monetary Growth:
8. What is the most obvious effect of inflation?
9. Define: destabilize
10. Identity four ways inflation destabilizes a country.
11. How can inflation destabilize a nation’s economy?
12. In 2005 and 2006, the price of cruse oil suddenly increased. What type of inflation might this development cause? Why?
13. Explain the difference between the price level and the rate of inflation.