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14 Cards in this Set
- Front
- Back
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Inflation
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An increase in the general (average) price level of goods and services in the economy
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Deflation
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A decrease in the general (average) price level of goods and services in the economy
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Consumer price index (CPI)
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An index that measures changes in the average prices of consumer goods and serivices
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Base Year
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A year chosen as a reference point for comparison with some earlier of later year
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Disinflation
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A reduction in the rate of inflation
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Nominal income
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The actual number of dollars recieved over a period of time
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Real income
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The actual number of dollars received (nominal income) adjusted for changes in the CPI
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Wealth
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The value of the stock of assets owned at some point in time.
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Nominal interest rate
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The actual rate of interest without adjustment for the inflation rate
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Real interest rate
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The nominal rate of interest minus the inflation rate
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Demand-pull inflation
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A rise in the general price level resulting from an excess of total spending (demand)
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Cost-push inflation
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An increase in the general price level resulting from an increase in the cost of production
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Hyperinflation
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An extremly rapidrise in the general price level
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Wage-price spiral
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A situation that occurs when increases in nominal wage rates are passed on in higher prices, which, in turn, result in even higher nominal wage rates and prices
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