Week 2 - Inflation and Interest Rates Flashcards
(7 cards)
1
Q
aggregate price level
A
measure of the overall level of prices in the economy
2
Q
price index
A
the ratio of the current cost of that market basket to the cost in a base year
3
Q
consumer price index
A
the most common measure of aggregate price level and used to measure inflation
4
Q
inflation rate
A
gives the percent increase in the overall level of prices per year
5
Q
real wage
A
the wage rate divided by the price level
6
Q
real income
A
the income divided by the price level
7
Q
disinflation
A
the process of bringing the inflation rate down
