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Topic 13: Economic Concepts - 33 (2) Two commonly used indexes are the Consumer Price Index (CPI) and the Producer Price Index (PPI) (a) CPI is calculated by the Bureau of Labor Statistics and measures the cost of a basket of goods and services over time (b) PPI is calculated by the US Department of Labor and measures wholesale cost of goods over a period of time 5 Business cycle A The term business cycle refers to a pattern of changing economic output and growth The business cycle starts at an initial period of growth and rises as the economy expands until it reaches a peak The economy then declines, reaching a trough, and subsequently starts to rebound to repeat the process B The peak is generally accompanied by an increased rate of in ation This results in a period of rising unemployment and declining national output, called a recession C A recession is a period when Real GDP declines for two or more successive quarters; a depression is a prolonged and very severe recession D Gross domestic product (GDP) is the most common means of measuring economic activity (1) GDP is the total value of all nal goods and services newly produced within a country by domestic factors of production (2) Trucks made in the United States by Honda are included in GDP, whereas IBM computers made in Europe are not E The key variables used for determining the phase of the business cycle are Real GDP and the unemployment rate Real GDP is nominal GDP that has been adjusted to remove the impact of in ation 6 In ation, de ation, disin ation, and recession A De nitions (1) In ation is manifested when prices are rising, when it costs more one year to buy the same goods and services as it did the year before (2) De ation is manifested when prices are falling (3) Disin ation is manifested when the rate of in ation decreases; prices are still rising, but at a slower pace (4) Recession is a period of rising unemployment (which may or may not be accompanied by de ation) Real GDP declines for two or more successive quarters B In ation (1) In a period of in ation, investors should avoid interest-sensitive securities and longterm debt instruments that pay xed amounts of interest (2) They should acquire short-term instruments (US Treasury bills) whose yields will increase with the rate of in ation (3) The expectations of an in ationary environment suggest that investors should stress common stocks of rms whose asset bases will be enhanced by increased asset values (oil, metal, and land companies) Investors should avoid stocks of rms lacking assets that would rise with in ation C De ation (1) In periods of de ation, prices of tangible assets (real estate, collectibles, and precious metals) will decline.

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The need for self-describing data: The Internet has been full of data for some time and it's growing by leaps and bounds even as you read this However, what's missing is metadata and structure Web data isn't typed, labeled, or related The publication of remote Web functions calls for the ability to call functions in a remote Web application, much as RMI allows you to access functions in remote Java applications This essentially means extending the distributed object model of system building to the Web, but in a nonproprietary manner Abstraction and integration of distributed Web functionality consists of repackaging and reusing more fine-grained functionality, which might exist at multiple remote locations, and collapsing it into one remote abstract function

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