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Chapter 11 - Measuring the Cost of Living
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6 Terms
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Inflation rate
the percentage change in the price index from the preceding period.
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GDP deflator
measure of the overall level of prices in the economy.
3
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Producer price index
a measure of the cost of a basket of goods and services bought by firms.
4
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overall level of prices
The purpose of measuring the ________ in the economy is to allow us to compare dollar figures from different times.
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Consumer price index (CPI)
a measure of the overall cost of the goods and services bought by a typical consumer.
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Substitution bias
when the price change from one year to the next, changes disproportionately
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