Chap 24 Macroeconomics

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Author:
amgallegos
ID:
131446
Filename:
Chap 24 Macroeconomics
Updated:
2012-01-29 15:40:04
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Vocab
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Chapter 24 Vocab
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  1. Consumer Price Index (CPI)
    • measure of overall cost of goods and services bought by a typical consumer
    • price of basket of goods and services in current year
    • price of basket in base year
    • X 100
  2. Inflation Rate
    • percentage change in price index from preceding period
    • inflation rate in year 2 = CPI year 2-CPI year 1
    • CPI year 1
    • x 100
  3. Producer Price Index
    measure of cost of basket of goods and services bought by firms
  4. Indexation
    • automatic correction by law or contract of a dollar amount for the effects of inflation
    • amount in todays dollars = amount in year T dollars x price level today
    • price level in year T
  5. Nominal Interest Rate
    interest rate as usually reported without a correction for the effects of inflation
  6. Real Interest Rate
    interest rate corrected for the effects of inflation

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