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9 Cards in this Set
- Front
- Back
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Consumer Price Index
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Measure of the overall cost of the goods and services bought by a typical consumer
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Consumer Price Index Formula
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Price of Basket of goods/services / Price of Basket in base year X 100
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Inflation Rate
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The percentage change in the price index from the preceding period
Consumer Price Index Year 2- CPI year 1 /CPI year 1 X100 |
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Producer Price Index
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Measures cost of a basket of goods/services bought by a firm
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Substitution Bias
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When prices change, everything changes different amounts.
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Unmeasured Quality Change
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If quality or value of something decreases, you're getting lesser good for the same amount of money
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Change Price From Different Years
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Amount in T Year X Price Level Today/Price Level in year T
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Nominal Interest Rate
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The interest rate as usually reported without a correction for the effects of inflation
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Real Interest Rate
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The interest rate corrected for the effects of inflation
Nominal Interest Rate-Inflation Rate |
