Flashcards - Inflation & Adjustment in Economics

Flashcards - Inflation & Adjustment in Economics
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the multiplier effect
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable
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real wage
Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought
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gross domestic product
Gross domestic product is a monetary measure of the market value of all final goods and services produced in a period
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The Consumer Price Index
A consumer price index measures changes in the price level of a market basket of consumer goods and services purchased by households
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nominal
Level of measurement or scale of measure is a classification that describes the nature of information within the numbers assigned to variables
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inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
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inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
nominal
Level of measurement or scale of measure is a classification that describes the nature of information within the numbers assigned to variables
The Consumer Price Index
A consumer price index measures changes in the price level of a market basket of consumer goods and services purchased by households
gross domestic product
Gross domestic product is a monetary measure of the market value of all final goods and services produced in a period
real wage
Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought
the multiplier effect
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable
Cost-push inflation
Cost-push inflation is an alleged type of inflation caused by substantial increases in the cost of important goods or services where no suitable alternative is available
substitution bias
Substitution bias describes a bias in economics index numbers arising from tendency to purchase inexpensive substitutes for expensive items when prices change
The marginal propensity to save
The marginal propensity to save is the fraction of an increase in income that is not spent on an increase in consumption
Stagflation
In economics, stagflation, a portmanteau of stagnation and inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high
equation of exchange
In economics, the equation of exchange is the relation: where, for a given period, is the total nominal amount of money supply in circulation on average in an economy
Money supply
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time
purchasing power
Purchasing power is the number of goods or services that can be purchased with a unit of currency

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