Macroeconomists define inflation/deflation in multiple ways. Please begin by giving us the definitions in terms of the consumer price index (CPI), the producer price index (PPI) and the GDP deflator.
a) From the point of view of the average standard of living of U.S. citizens, why is the CPI the best measure of inflation/deflation?
b) Nonetheless, with reference to an economy with just two commodities, chicken and beef, explain why “substitution effects” mean that the CPI can be misleading. In this two-commodity economy, suppose that, between year 1 and year 2, there is a shift to the right in the supply curve for chicken and a shift to the left in the supply curve for beef, holding everything else (e.g., the demand curves for chicken and beef) constant.
c) With reference to the following data about a two-commodity economy, explain how macroeconomists calculate the GDP deflator, thereby solving the problem that substitution effects pose for our efforts to measure the effects of inflation/deflation on the average standard of living.
2009 nominal GDP 2018 nominal GDP
Bananas 15 at $0.20 20 at $0.30
Oranges 50 at $0.22 60 at $0.25
d) What patterns can be discerned in the data on inflation/deflation since World War II? In particular, please identify business-cycle peaks, business-cycle troughs, recessions, economic expansions, and trend rates of change during the Golden Age of U.S. economic development (1950-1973), the Neoliberal Era (1982-2007), and since the 2007-08 financial crisis.
an-Pierre Jeunet’s Le Fabuleux destin d’Amélie Poulain, better known as Amélie, is Jeunet’s contribution to France’s cinematic history. A critical and popular success, both nationally and internationally, Jeunet expertly employs the idea of the spectacle to provide viewers with opportunities for autonomy, emphasising the role of the audience beyond consumers of media. As a modern homage to French film, Amélie is beautifully crafted-with a deep understanding of our contemporary era and the cultural hegemony of Hollywood-to honour the past cinematic tradition of France without isolating itself from its own context and as such is a true fulfilment of Jeunet’s goal: a worthy contribution to the French cinematic tradition. With the recovery of Hollywood in the 1970s, American films, once again, dominated the global market. As demonstrated by filmmakers such as Luc Besson, the struggle of the European filmmakers in the post-Hollywood era was either to “reject the American model and lose viewers, or try to imitate Hollywood with a local accent.” With the struggle of competing against Hollywood and the consequent decline in the export of films, there was a growing conservatism in investors and, as such, experimentation in film dwindled. To compete with Hollywood’s technological innovation-high speed chases, explosions-European filmmakers focused on creating a captivating surface to their films, with the striking image to serve as the ultimate spectacle. In France, this trend manifested itself in the Cinema du Look. A highly artificial aesthetic, Cinema du Look drew visual inspiration from mass culture-music videos, advertisements, fashion photography-to create an aesthetic of surfaces, speaking to the realities of the capitalist era and the significance of the ima>GET ANSWER