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18 Cards in this Set

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