Economic Indicators (CPI, Inflation, & Real GDP)

Question 1

Market Basket
Consumer Price Index
Inflation

Answer 1

Fixed list of items an average household buys
Comparing the different values of a market basket when affected by a change in price
Overall rise in prices

Question 2

Consumer Price Index
Inflation

Answer 2

Value of market basket in a given year divided by base year x 100

Price level in year 2 - year 1 divided by price level in year 1 x 100

Question 3

Real GDP (Definition & Calculation)
Nominal GDP (Definition & Calculation)

Answer 3

calculates the change in price
year 1 price x year 2 quantities
not adjusted for a change in price
current year prices x current year quantities