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15 Cards in this Set
- Front
- Back
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Real wage |
The wage rate divided by the price level |
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Real Income |
Is the income divided by the price level |
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Inflation rate |
The % change per year in a price index-typically the consumer price index |
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Shoe-leather costs |
Are the increased costs of transactions caused by inflation |
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Menu costs |
The real costs of changing listed prices |
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Unit of account costs |
A rise from the way inflation makes money a less reliable unit of measurement |
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Nominal interest rate |
The interest rate actually paid for a loan |
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Real interest rate |
The nominal interest rate minus the rate of inflation |
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Disinflation |
The process of bringing the inflation rate down |
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Aggregate price level |
A measure of overall level of prices in the economy |
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Market basket |
A hypothetical set of consumer purchases of goods/services |
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Price index |
Measures the cost of purchasing a given market basket in a given year. The index value is normalized so that it is equal to 100 in the selected base year |
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Consumer price index (CPI) |
Measures the cost of the market basket of a typical urban America family |
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Producer price index (PPI) |
Measures changes in the price of goods/services purchased by producers |
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GDP deflater |
For a given year is 100 times the ratio of nominal GDP to real GDP in that year |
