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15 Cards in this Set
- Front
- Back
Real Wage |
Wage rate ÷ price level |
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Real Income |
Income ÷ price level |
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Inflation Rate |
% change per year in a price index - typically the consumer price index |
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Shoe-Leather Cost |
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 |
Arise 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 the 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 American family |
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Producer Price Index(PPI) |
Measures changes in the prices of goods and services by producers |
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GDP Deflator |
For a given year is 100 times the ratio of nominal GDP to real GDP in that year |