Supply & Demand, Interest & Inflation Flashcards
law of demand = ?
as price goes up, the quantity demanded goes down
however as demand goes up, price goes up
price and demand are linked
are demand and quantity demanded the same thing?
no
demand = ?
how much a particular good/service is desired in the market
influences price as it impacts what people are willing to pay for it
law of supply = ?
as price goes up, quantity supplied goes up
market equilibrium = ?
the point at which supply of goods/services equate to the demand for the goods/services
surplus = ?
supply > demand
shortage = ?
demand > supply
how is inflation measured?
inflation is measured using CPI
CPI = ?
consumer price index
a collection of goods/services’ price is assessed year on year and the prices across the years are assessed to identify inflation/deflation
increase in money supply results in…?
inflation
because the more money, the less scarce, the less valuable
price inflation = ?
generally refers to an increase in the level of prices of goods/services
deflation = ?
negative inflation
CPI-U = ?
consumer price index - urban consumers
the CPI that are generally being referred to when inflation is discussed
most of the population are urban consumers
inflation = ?
weakening of a currency and subsequent increase in the price of goods/services
measured using CPI
interest = ?
added amount a borrower must pay on a loan in addition to the principal payment
