SITE AND PURPOSE:The Bureau of Labor Statistics site contains much data and educational information on inflation, and the characteristics of its chief measure, the consumer price index.The purpose will be to have some personal connection to the level of inflation, and to understand the CPI in ways the textbook cannot provide.SITE ADDRESS, INSTRUCTIONS AND ASSIGNMENT:

• Go to https://www.bls.gov/cpi/latest-numbers.htm Find the CPI for the most current month, the most current full year, using "not seasonally adjusted" or NSA. Then, surf around the site to find the base year on which the CPI is calculated.
• Go tohttp://www.bls.gov/cpi/. Surf around (look for the FAQ or the Factsheets) to find information, and explain in your own words how the CPI is calculated.
• Scroll down to "Calculators" and select the Inflation Calculator. Pick a year in the past that has some significance for you (maybe the year you were born, got your first job, bought your first house, car, etc.). See how much $100 then is worth now.Then, do the same thing for 1980. Then work backwards. Select the current year as the base year, and enter $100. Then, use 1980 as the calculated year and use $3.50, so that you will see how much you needed in 1980 dollars to get what $3.50 will buy today. (Why $3.50? That is roughly the price of gasoline for a couple of years, up until June, 2014. In 1980, gasoline topped out at about $1.55 per gallon. Is it cheaper today, or in 1980?)
• Go tohttps://www.bls.gov/cpi/questions-and-answers.htm. Pick one, summarize the answer Explain why it is important to you.
• Now, let's tie some things together. Under what economic conditions (GDP growth and unemployment) is inflation likely to be low (from 0-2.5%)? Under what economic conditions is inflation likely to be high enough to cause concern to policy makers (3-4.5%)? Under what conditions is inflation likely to be higher than that?
• Which is worse: high unemployment or high inflation? Why?