Inflation and Price Indices
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Created by:
sportyperson246 on April 10, 2010
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9 terms
Terms | Definitions |
|---|---|
 inflation | inc in the general PL |
| deflation | dec in the general PL |
| nominal | actual # of dollars |
| real | the purchasing power of dollars |
| money illusion | people think of money as a number rather than its actual value |
| menu cost | is the real cost of changing a listed price |
| Consumer Price Index | Shows changes in the average prices of goods and services purchased by consumers over a period of time |
| Producer Price Index | similar to CPI but applies to prices of wholesale goods such as lumber and steel |
| Gross Domestic Product Deflator | alternative general price index that reflects the importance of products in current market baskets, rather than in base year market baskets, which become less relevant over time. |
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