Tags & Description
Substitution bias
________: when some prices in a basket change disproportionately compared to others.
GDP deflator
The ________ reflects the prices of all goods and services produced domestically.
Consumer Price Index
The ________ (CPI) is used to monitor changes in the cost of living over time.
Bureau of Labor Statistics
________ (BLS): a department that computes and reports the CPI.
Inflation rate
________: the percentage change in the price index from the preceding period.
Consumers
________ respond to raised prices by buying less of that product.
CPI
Core ________: a measure of the overall cost of consumer goods and services excluding food and energy.
Nominal Interest Rates
Cost- of- living allowance (COLA): a provision that automatically raises the wage when the CPI rises Real and ________.
index
If a(n) ________ measures a fixed basket of goods, it does not show the increase in the value of a dollar that comes from the introduction of a new good.
price index
Producer ________ (PPI): a measure of the cost of a basket of goods and services bought by firms Problems in Measuring the Cost of Living.
GDP deflator
The CPI uses a fixed basket to measure values, while the ________ compares the price of currently produced goods and services 24- 2 Correcting Economic Variables for the Effect of Inflation Dollar Figures from Different Times.
Consumer price index
________ (CPI): a measure of the overall cost of the goods and services bought by a typical consumer.
Indexation
________: the automatic correction by law or contract of a dollar amount for the effects of inflation.