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18 Cards in this Set
- Front
- Back
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An increase in the average level of prices of goods and services
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inflation
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A decrease in the average level of prices of goods and services
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Deflation
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The price of one good in comparison with the price of other goods.
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relative price
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The amount of money income received in a given time period, measured in current dollars.
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nominal income
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income in constant dollars; nominal income adjusted for inflation.
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Real income
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The use of nominal dollars rather than real dollars to gauge changes in one's income or wealth.
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money illustion
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Inflation rate in excess of 200 percent, lasting at least one year.
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hyperinflation
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The movement of taxpayers into higher tax brackets as nominal incomes grow
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bracket creep
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A measure of changes in the average price of consumer goods and services.
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Consumer price index
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The time period used for comparative analysis; the basis for indexing, for example, of price changes.
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base period
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the percentage of total expenditure spent on a specific product; used to compute inflation indexes.
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item weight
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A price index that refers to all goods and services included in GDP
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GDP deflator
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The value of final output produced in a given period, measured in the prices of that period.
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nominal GDP
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The value of final output produced in a given period, adjusted for changing prices.
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real GDP
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That absence of significant changes in the average price level; officially defined as a rate of inflation of less than 3 percent
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price stability
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Automatic adjustments of nominal income to the rate of inflation.
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cost of living adjustment. (cola)
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the nominal interest rate minus the anticipated inflation rate.
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Real interst rate
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a mortgage that adjusts the nominal interest rate to changing rates of inflation.
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adjustable rate mortgage
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