What is the monthly statistic that measures the pace of inflation or deflation?
Chapter 2 Vocab
| Term | Definition |
|---|---|
| Consumer Price Index (CPI) | Monthly statistics that measure the pace of inflation or deflation. |
| Core Inflation | The CPI minus food and energy costs. |
| Producer Price Index (PPI) | An index that measures prices at the wholesale level. |
What is used to measure the pace of inflation or deflation?
The CPI is an economic indicator that is most frequently used for identifying periods of inflation (or deflation) in the U.S. While the CPI is the most widely watched and used measure of the U.S.’s inflation rate, many economists differ on how they believe inflation should be measured.
What is the political and economic system in which the government makes almost all economic?
Communism — An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production. Prices don’t reflect demand, which may lead to shortages of items, including food and clothing.
What is an economic system based on free markets in which all or most of the factors of production and distribution are privately owned and operated for profit?
What is capitalism? an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
What are the 6 characteristics of a free market economy?
Characteristics of a Market Economy (free enterprise)
- Private Property.
- Economic Freedom.
- Consumer Sovereignty.
- Competition.
- Profit.
- Voluntary Exchange.
- Limited Government Involvement.
What are the basic factors of every economy?
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. The first factor of production is land, but this includes any natural resource used to produce goods and services.
How do you know if the economy is growing?
Growth. An economy provides people with goods and services, and economists measure its performance by studying the gross domestic product (GDP)—the market value of all goods and services produced by the economy in a given year. If GDP goes up, the economy is growing; if it goes down, the economy is contracting.
What makes a strong economy?
What makes a good economy? A strong labor market, predominantly, though the public also values lower inflation, more economic growth, and a stronger dollar.
Does a strong currency mean a strong economy?
In general, a strong currency means a strong national economy. Also, strong currency limits price increase and lowers the cost of credits because the interest rates are low as the inflation is low. The strong currency reduces the price of commodity supplies such as gas and oil imports.
How do you build your own economy?
Create massive expansion in any economy:
- Increase your think. Don’t think small. Think bigger.
- Fill your pipeline. Keep your calendar full. Don’t bet on one deal or client.
- Follow the money, not just the hustle. Windows are closing. Maximize what you can while it’s still available.
How can you improve your economic status?
To increase economic growth
- Lower interest rates – reduce the cost of borrowing and increase consumer spending and investment.
- Increased real wages – if nominal wages grow above inflation then consumers have more disposable to spend.
- Higher global growth – leading to increased export spending.