6.6 Inflation

Increase in the price level.

• Deflation

• Inflation

• Stagnation

• Recession

The inflation rate minus the percentage change in food and energy prices.

• Core inflation rate

• Consumer price index

• Gross domestic product deflator

• Headline inflation rate

Decrease in the price level.

• Inflation

• Deflation

• Stagnation

• Recession

Inflation occurs when the money supply within the economy is too large.

• Quantity theory

• Demand-pull theory

• Cost-push theory

• Monetary policy theory

Chosen to measure the prices of goods and services in the market basket over time.

• Base year

• Market index

• Price level

• Consumer price

Inflation occurs when producers raise prices in order to meet increased costs.

• Cost-push theory

• Demand-pull theory

• Monetary theory

• Structural inflation

Inflation occurs when the demand for goods and services exceeds existing supply.

• Demand-pull theory

• Cost-push theory

• Monetary theory

• Supply-side theory

A measure of the variation over time in the price of a typical group of goods purchased by urban consumers.

• Consumer Price Index (CPI)

• Gross Domestic Product (GDP)

• Retail Price Index (RPI)

• Producer Price Index (PPI)

A group of goods typically purchased by an urban consumer.

• Market basket

• Shopping cart

• Consumer bundle

• Urban goods collection