Economic Inflation Concepts: Measurement Methods and Price Index Applications

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Economics - Macroeconomics

andrsonztdc Created by 10 mon ago

Cards in this deck(40)

A payment is said to be _____ if it is automatically adjusted for inflation.

What term is used to describe a hypothetical group of different items, with specified quantities of each one, used as a basis for calculating how the price level changes over time? This is known as a _____ of goods and services.

Inflation calculated using a fixed basket of goods over time tends to overstate the true rise in cost of living because it doesn't take into account improvements in the quality of existing goods or the invention of new goods. This characteristic is related to _____ bias.

What term is used to describe a measure of inflation based on the prices paid for supplies and inputs by producers of goods and services? This is known as the _____ Price Index.

A measure of inflation based on all the components of GDP is known as the _____ deflator.

What term is used to describe the economic statistic actually announced at that time, not adjusted for inflation? This is known as the _____ value.

_____ implies that pressure for price increases reaches across _____ markets, not just one.

If the price index moves from 107 to 110, the rate of inflation is _____%.

One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living is due to _____ bias.

The difference between nominal GDP and real GDP is that real GDP adjusts for _____.

When a price, wage, or interest rate is adjusted automatically with inflation, it is said to be _____.

Which of the following refers to the rate of interest with inflation subtracted? This is known as the _____ interest rate.

Aggregate supply (AS) denotes the relationship between the _____ that firms choose to produce and sell and the _____, holding the price of inputs fixed.

Aggregate supply curves are _____ for low levels of output, and _____ for high levels of output.

_____ happens when the economy is producing at its potential and unemployment is at the natural rate of unemployment.

Refer to the graph above. A government creating economic policy in these circumstances should be most concerned about _____.

Referring to the above diagram, which of the following is a true statement? _____

Potential GDP in the U.S. will be unaffected by _____.

Say's Law argues that a given _____ must create an equivalent _____ somewhere else in the economy.

According to the Keynesian framework, _____ in _____ may cause inflation, but not a recession.

According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession? _____

Aggregate demand is more likely to _____ than aggregate supply in the short run.

Consumption, investment, government spending, exports, and imports are all components of _____.

If a Phillips curve shows that unemployment is low and inflation is high in the economy, then that economy is producing at a point where output is _____ potential GDP.

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy is producing at a point where output is _____ potential GDP.

If markets throughout the global economy all have flexible and continually adjusting prices, then each economy will always head for its _____ rate of unemployment.

In a Keynesian cross diagram, what name is given to the distance between an output level that is below potential GDP and the level of potential GDP? This is known as a _____ gap.

Keynesian economics focuses on explaining why recessions and depressions occur, as well as offering a _____ for minimizing their effects.

Refer to the graph shown below. At point A, the economy has _____.

Refer to the graph shown below. Point C in the graph represents _____ and all of the above.

The economic theory known as the permanent income hypothesis is synonymous with _____ expectations.

The economy is in a recession and the government wants to increase output. If the multiplier equals 3 and the government increases spending by 250, how much will output increase by? The output will increase by _____.

A vertical aggregate supply curve, where the quantity of output is consistent with many different price levels, also implies a _____ Phillips curve.

_____ economists place an emphasis on _____ run economic performance.

From a neoclassical perspective, which of the following would most likely be viewed as an element that underpins long-run productivity growth in the economy? This is known as investments in _____.

From a neoclassical viewpoint, government should focus less on _____ unemployment.

If aggregate supply is vertical, then aggregate demand does not affect the quantity of _____.

Referring to the diagram above, complete the following sentence: Any increase in aggregate demand in the short-run will lead to an increase in output (Q1 to Q2), but it will also lead to prices _____.

Referring to the diagram above, which of the following is a true statement? The increase in output (Q1 to Q2) may come about because of lower levels of _____.

Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession? Because the standard of living is ultimately determined by _____ growth.

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