If it is the case there is no inflation that has happened. The prices remain the same this is the total dollar expenditure on the market basket in the base year is the same as in the current year.
Base year CPI is always 100. This benchmark allows you to easily compare changes between the current year and a base year and compare several different economic indicators starting from the base year.
An economy is considered to be at full employment if the actual unemployment rate is equal to the natural rate of unemployment. At full employment, real GDP equals potential real GDP.
The natural rate of unemployment (NRU) is the rate of unemployment that exists when the economy is at full employment and producing real output. NRU equals the sum of frictional unemployment and structural unemployment is the total dollar expenditure.
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In this case there is no inflation. Prices remain the same.
Base year is the base year against which price comparisons are based. CPI compares the current prices of the commodities in the basket with the prices of these commodities in the base year. Here is a simple example of CPI calculation: Suppose Country A has only 3 items in its shopping cart.
The government announced Monday that he has no plans to change the base year for calculating Gross Domestic Product (GDP) from 2020 to 2021. The current base year for GDP calculation at constant prices is 2011-12.
For financial measures, the base year is the first year of several years. Usually set to an arbitrary amount of 100. New and current base years are added regularly to keep the data in one database up to date.
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