ECON 1102 Chapter Notes - Chapter 12: Gdp Deflator, Deflation, Money Supply
Document Summary
Chapter 12: inflation and the quantity theory of money. Inflation: increase in the average level of prices. Inflation rate: the percentage of change in the average level of prices (as measured by a price index) over a period of time. Consumer price index (cpi): measures the average price for a basket of goods and services bought by a typical american consumer. Gdp deflator: the ratio of nominal to real gdp multiplied by 100, covers all final goods. Producer prices indexes (ppi): measure the average price received by producers, measures intermediate and final goods. Real price: a price that has been corrected for inflation. V = velocity: average number of times a dollar is spent on final goods and services in a year. Yr and v are normally stable during a year. Quantity theory of money is also written for growth rate: m + v = p + yr.
