To find a Rate of Change
(New – Old)/Old x 100
2014
(102.51 – 100.55) / 100.55 x 100
1.96/100.55 x 100
.01949 x 100
1.949 then round up = 1.95
2015
(107.52 – 102.51)/ 102.51 x 100
5.01 / 102.51 x 100
.04887 x 100
4.887 then round up = 4.89
2012
Unemployed + Employed = Labor Force
.99 + 12.50 = 13.49 (Labor Force)
Unemployed / Labor force x 100 = Unemployment Rate
.99/13.49 x 100
.07338 x 100 = 7.338 Then round up = 7.34 Unemployment Rate (2012)
2013
Unemployed + Employed = Labor Force
.71 + 12.60 = 13.31 (Labor Force)
Unemployed / Labor force x 100 = Unemployment Rate
.71/ 13.31 x 100
.5334 x 100 = 5.334 Then round down = 5.33 Unemployment Rate (2013)
· Investment Spending – As companies can predict future revenues and costs with less uncertainty/more confidence there are higher levels of investment spending.
· Export Competitiveness – as PL (price levels) doesn’t change export sells are more competitive so trade deficits do not widen creating BOP (balance of payment) problems/ export-driven growth is maintained.
· Income Inequality Stability – money wage earners and recipients of transfer payments do not suffer a decrease in their purchasing power as they usually cannot negotiate higher wages/payments (income inequality doesn’t widen).
· Price Mechanism Efficiency – efficiency of the price mechanism is maintained permitting efficient allocation of resources.
· Lenders Loss – so income is not redistributed from lenders to borrowers, so that lenders (banks) do not charge unnecessarily high interest rates/ so that borrowing is not excessively encouraged.
· Borrowers Loss – so income is not redistributed from consumers to other groups such as banks, shareholders or producers who would benefit from higher profits (or so income inequality does not widen)
· Currency Depreciation – which leads to higher import prices and production costs.
· Deflationary Spiral – prices and profits keep falling.
· Deflationary Gap – decrease in economic activity and higher unemployment or bankruptcies.
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