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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.

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.

market basket

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

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