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Inflation rises - PowerPoint PPT Presentation

Federal Reserve Policy

Federal Reserve Policy. David Papell University of Houston Economic Forecast Lunch April 23, 2008. The Taylor Rule. The Fed raises the nominal interest rate r when real GDP is greater than potential GDP and when inflation is greater than the target inflation rate.

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Chapter 3 Your Purchasing Power

Chapter 3 Your Purchasing Power. What Is Inflation?. Inflation is an increase in prices for goods and services. Consumer Price Index (CPI) measures price changes over time. As inflation rises, the purchasing power of the dollar falls. 3-1 Inflation and the Value of Money.

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Inflation rises - PowerPoint PPT Presentation

Federal Reserve Policy

Chapter 3 Your Purchasing Power