CHAPTER 32 – ECONOMIC INDICATORS The key economic indicators that affect our economy are:
1. Inflation 2. Employment rate 3. Interest rates 4. National income 5. Economic growth 6. National debt.
INFLATION
Inflation is an increase in the price of goods and services. It is when your money can buy fewer goods and services than it could before.
Consider a basket of groceries that cost €56.50 in January 2015. The same basket cost €62.45 in January 2016. This shows that inflation has occurred in the economy during this period.
JANUARY 2015 €56.50
JANUARY 2016 €62.45
Inflation is measured by the Consumer Price Index (CPI). The CPI works by selecting a sample of goods and services and comparing their prices on a regular basis.
Look at the following line graph showing Ireland’s Consumer Price Index (CPI) from 2006 to 2016 and answer the questions that follow.
Line Graph Showing Ireland’s Consumer Price Index (CPI) from 2006 to 2016 2006 2008 2010 2012 2014 2016
