III. Money vs. real GDP (taking inflation out of financial data) 
      A. A Price Index measures price changes for a basket of commonly used goods over a period of years. 
          1. One year is chosen as a base year, set equal to 100 and years before and after are expressed as a 
              percent of the base year. 
          2. For convenience all index calculations are multiplied by 100 allowing the percent sign to be dropped. 
          3. Two important indexes are the Consumer Price Index (CPI) and the Producer Price Index (PPI) 
              which respectively  measure the inflation associated with consumer and producer goods.
     B. An index can be used to determine whether someone's salary, a consumer good, and other items of 
          interest have changed more or less than inflation.
         1. Nominal salary is salary measured in current dollars.
         2. Real salary is salary adjusted for inflation.
    C. This example uses actual consumer price changes and 1982 as the base year (P_B). The item of interest 
         could be  someone's salary, the price of a new car, etc. (P_C is price in current year).

IV. Interpreting national income account data
      A. Comparing data over time requires adjusting for inflation, population increases, and 
           number of people working, and quality of goods produces. As the chart to the right
           indicates, some people think government adjustments distorts government statistics.
      B. National income accounts do not consider leisure time.
      C. Positive and negative effects of economic activity upon the environment are not 
           measured by national income accounts.