Module 14 Inflation: An Overview
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Until-of-account costs
arise from the way inflation makes money a less reliable unit of measure
Real Income
income divided by the price level
Disinflation
the process of bringing the inflation rate down
Menu Costs
the real costs of changing listed prices
Real Wage
the wage rate divided by the price level
Shoe Leather Costs
the increased costs of transactions caused by inflation
Nominal Interest Rate
the interest rate actually paid for a loan
Real Interest Rate
the nominal interest rate minus the inflation rate
Inflation Rate
the percent change per year in a price index- typically the consumer price index