# Chapter 13 output

### 14 terms by slb4040

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### inflation

definition: A continuous rise in the price of goods or services combined with the reduced value of money.

usage:Sharp rises in inflation often lead to a barter economy, where people exchange items of value instead of using money to pay for them

### prince index

definition:A measurement that shows how the average price of a standard group of goods changes over time.

usage:A price index can be used to measure how much prices can vary over time.

or
a statistical series that can be used to measure changes in prices over time. it can be compiled for a specific product or a range of items.

### base year

definition:Year serving as point of comparison for other years in a price index or other statistical measure.

usage:The first step to calculating real gross domestic product is choosing a base year

or a year that serves as the basis of comparison for all other years.

### market basket consumer price index

definition:Index used to measure price changes for a market basket of frequently used consumer items.

usage:The market basket consumer price index reports on price changes for about 80,000 items in 364 categories.

### producer price index

definition:Index used to measure prices received by domestic producers; formerly called the wholesale price index.

usage:The producer price index is used to gauge the rate of inflation and help the government understand how much prices are rising.

### implicit GDP price deflator

definition:Index used to measure price changes in Gross Domestic Product

usage:Unlike some price indexes, the implicit GDP price deflator is not based on a fixed basket of goods and services.

### current gdp

definition:Gross Domestic Product measured in current prices, unadjusted for inflation

usage:Within each country the current GDP, or Gross Domestic Product, is normally measured by a national government statistical agency.

dont ajust for inflation

### real gdp

definition:Gross Domestic Product after adjustments for inflation; same as GDP in constant dollar

usage:Real GDP is the total market value, measured in constant prices, of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year.

inflation has been removed

### GDP in constant dollars

definition:Gross Domestic Product after adjustments for inflation; also called GDP in constant (chained) dollars; same as real GDP

usage:Comparing the GDP in constant dollars for different years can show whether the standard of living in a country is declining or increasing over time.

a representative selection of commonly purchased goods and services

### Consumer price index (CPI)

reports on price changes for about 80,000 items in 364 categories

### producer price index

measures price changes paid by domestic producers for their inputs

### implicit gdp price deflator

an index of average levels of prices for all goods and services in the economy

### convert gdp to real dollars

real gdp = gdp in current dollars / implicit gdp price deflator x 100

Example: