Inflation and Deflation Flashcards
1
Q
Inflation
A
The sustained rise in the general price level
2
Q
Deflation
A
General decrease in price level when inflation rate falls below 0%
3
Q
CPI
A
tracks prices of 700 most popular G+S consumed by households- sum of (prices x weights)/ sum of the weights
4
Q
Quantity theory of money equation
A
M x V = P x Q/Y
5
Q
M?
A
quantity of money
6
Q
V
A
Velocity of money
7
Q
P
A
Price level
8
Q
Q/Y
A
Real GDP/income
