BC Journal

#Finterms: Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure that tracks the changes in the price level of a basket of consumer goods and services over time. It is used as an indicator of inflation or deflation in an economy.

The CPI is calculated by selecting a representative sample of goods and services commonly purchased by households, such as food, housing, transportation, and medical care, and then measuring the price changes of these items over time.

The CPI is expressed as a percentage change from a base year, with the base year typically set to 100. A CPI value greater than 100 indicates that prices have increased relative to the base year, while a value less than 100 indicates that prices have decreased.

By tracking changes in the CPI, economists and policymakers can assess the rate of inflation or deflation and make adjustments to monetary policy or other economic measures as needed.

#CPI #indicator #inflation #deflation #consumer #economy

Financial Literacy

#Finterms: Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is a measure used to gauge the economic performance of a country. It represents the total monetary value of all goods and services produced within the borders of a country during a specific time period, typically annually or quarterly.

GDP encompasses the output of all sectors of the economy, including consumption, investment, government spending, and net exports (exports minus imports). It is one of the key indicators used by economists and policymakers to assess the overall health and growth of an economy.

#economy #GDP #monetaryvalue #indicator

Financial Literacy

#Finterms: S&P 500

The S&P 500, or Standard & Poor's 500, is a stock market index tracking 500 large-cap U.S. companies, reflecting the nation's economic health.

Managed by S&P Dow Jones Indices, it spans sectors like technology, healthcare, finance, and consumer goods, chosen based on market capitalization, liquidity, and stability. Its value is weighted by market capitalization, giving greater influence to higher-valued companies.

Widely seen as a barometer for the entire U.S. stock market, the S&P 500 is used by investors to assess portfolio performance and make investment decisions. It also serves as a basis for various financial products, including index funds and ETFs, which mimic its performance.

#stockmarket #index #largecap #marketcapitalization

Financial Literacy

#Finterms: Russell 2000

The Russell 2000, managed by FTSE Russell, tracks around 2,000 small-cap U.S. companies, serving as a key benchmark for small-cap stocks. It consists of firms with lower market capitalizations than those in larger indices like the S&P 500, specifically the smallest 2,000 stocks from the Russell 3000 Index, which encompasses the 3,000 largest publicly traded U.S. companies.

Small-cap companies, being less established and having smaller market capitalizations, may offer higher growth potential but are also more volatile.

Consequently, the Russell 2000 is widely utilized by investors and financial professionals to assess the performance of smaller firms and as a benchmark for small-cap investment strategies.

#smallcap #benchmark #marketcapitalization

Financial Literacy