Mini Midterm (Ch. 24) Flashcards Preview

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Flashcards in Mini Midterm (Ch. 24) Deck (6)
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1

Consumer price index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

2

Inflation rate

the percentage change in the price index from the preceding period

3

Producer price index (PPI)

a measure of the cost of a basket of goods and services bought by firms

4

Indexation

the automatic correction by law or contract of a dollar amount for the effects of inflation

5

Nominal interest rate

the interest rate as usually reported without a correction for the effects of inflation

6

Real interest rate

the interest rate cor- rected for the effects of inflation