economics chapter 14 module 42

what is the Consumer Price Index (CPI)

Consumer Price Index (CPI) is a measure of the overall price level faced by a typical consumer.

What is stagflation?

Stagflation refers to a time of sluggish economic growth, high unemployment, and high inflation.

define the economy's potential output.

The economy's potential output is the level of real GDP that is produced when there is full employment.

what is deflation?

deflation is a decline in the price level.

what is hyperinflation?

hyperinflation is very rapid inflation.

what is inflation?

inflation is a rise in the price level.

what are menu costs?

menu costs are the costs of updating prices due to inflation.

what are shoe leather costs?

shoe leather costs are the costs of time and effort involved in frequent trips to the bank or ATM to avoid holding much cash during times of high inflation.

what is the inflation rate?

the inflation rate is the annual percentage increase in the price level.