Chapter 19 what macroeconomics is all about notes. N when aggregate output rises, output of many commodities and incomes of many people rise with it. N when price level rises, many people in economy are forced to make adjustments. N when unemployment rate rises, many workers suffer reductions in their incomes. N when the economy is at potential gdp, economists say there is full employment. N consumer price index (cpi) an index of the average prices of goods and services commonly bought by households. N since pl is measured with index number, its value at any specific time has meaning when compared to value at some other time. N purchasing power of money (ppm) the amount of goods and services that can be purchased with a unit of money. N inflation reduces the purchasing power of money; it also reduces the real value of any sum fixed in nominal terms.