GDP and CPI

Order Description

Chapter 7 talks about GDP and CPI, and why the government would differentiate between nominal and real

measures of economic activity. In 2013, President Obama proposed changing the measure used to adjust tax

brackets and Social Security benefits to the “chained Consumer Price Index.” Read this article from US NEWS:

http://money.usnews.com/money/retirement/articles/2013/04/29/how-the-chained-cpi-affects-social-securitypayments

Write a short essay (no more than 2 pages) explaining:

1) what are real and nominal measures, and define CPI (an index that converts nominal measures to real

terms);

2) how chained CPI is different from regular CPI; which index (CPI or chained CPI) leads to smaller social

security payments;

3) discuss who benefits and who loses from this change, and why.

Writing Assignment

Chapter 7 talks about GDP and CPI,

and why the government would differentiate between nominal and real

measures of economic activity.

In 2013,

President Obama proposed changing the measure used to adjust tax

brackets and Social Security benefits to the “chained Consumer Price Index.” Read th

is article

from US NEWS

:

http://money.usnews.com/money/retirement/articles/2013/04/29/how

–

the

–

chained

–

cpi

–

affects

–

social

–

security

–

payments

Write a short essay (no more than 2

page

s

) explaining

:

1)

what are real and nominal measures, and

define CPI (an index that converts nominal measures to real

terms)

;

2)

how chained CPI is different from regular CPI

;

which index (CPI or chained CPI) leads to smaller social

security payments;

3)

discuss

who benefits and who loses from this change

, and why.

Grading Rubric

Your essay will be assessed as either “Meets expecta

tions” or “Needs improvement”.

If your essay

needs improvement, you will be given feedback from NetTutor to help you revise it. You

have one week

from the time NetTutor returns your essay t

o re

–

submit the revised essay to NetTutor for another try,

but you only get one sec

ond chance. Check your NetTutor

account frequently after submission so you

see their feedback as soon as possible.

Below are the criteria your essay will be judged against.

If your final paper meets expectations in both categories

you will receive full credit. If your final essay fails to meet expectations in any or all categories you will receive

partial credit. You will receive no credit

only if you do not submit any essay

to NetTutor

.

Your essay should be no longer than 2 pages long, with 12 point font and standard margins. It must be a format

readable by MSWORD, so doc or rtf. Here are the criteria your essay will be judged against:

Criterion

Needs improvement

Meets expec

tations

Writing

(

50%

)

The writing is difficult to follow and/or

poorly organized. Transition sentences are

absent or ineffective. Typos and/or

grammatical errors distract the reader.

Ideas are well

–

organized. Transition

sentences

e

ff

ectively

connect one idea

to the next. The essay is free of typos

and grammatical errors.

Economic

analysis

(

50%

)

Real and nominal measures of the

economy are incorrectly differentiated.

The difference between the regular and

Chained CPI is not clearly exp

ressed.

Winners and losers of the policy change

are not identified.

Real and nomina

l measures of the

economy are

correctly differentiated.

The difference between the regular and

Chained CPI is clearly expressed.

Winners and losers of the policy change

are

identified.

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