Inflation Flashcards
(9 cards)
1
Q
Difference between CPI and GDP deflator
A
The two measure piece changes for different “baskets” of products
2
Q
GDP Deflator
A
Nominal/Real • 100
3
Q
Year over year inflation rate
A
GDP Deflator(2013)- Deflator(2012)/ Deflator(2012) • 100
4
Q
CPI of Base Year
A
Always 100
5
Q
CPI Formula
A
Cost of goods using year 2 prices/cost of same goods year 1 prices • 100
6
Q
Inflation Rate
A
Current price level-Old Price level/old price level • 100
7
Q
Real GDP Growth Formula
A
Real GDP of current year- Real GDP of old year\ Old year • 100
8
Q
Inflation is defined as
A
An increase in the average level of prices and a decrease in purchasing power of money
9
Q
Unexpected inflation hurts
A
Lenders
