Term
| What are the three approaches to measuring GDP? |
|
Definition
| Product, income, and expenditure approaches |
|
|
Term
| Explain the concept of valued added? |
|
Definition
| For each producer, value added is equal to the value of totla production minus the cost of intermediate inputs. |
|
|
Term
| Why is the income-expenditure identity important? |
|
Definition
| This identity emphasizes the poin that all sales of output provide income somewhere in the economy. The identity also provides two separate ways of measuring total output in the economy. |
|
|
Term
| What is the difference between GDP and GNP? |
|
Definition
| GNp is equal to GDP (domestic production) plus net factor payments from abroad. Net factor payments represent income for domestic residents that are earned from production that takes place in foreign countries. |
|
|
Term
| Is GDP a good measure of economic welfare? Why or why not? |
|
Definition
| GDP provides a reasonable approximation of economic welfare. However, GDP ignores the value of nonmarket economic activity. GDP also measures only total income without reference to how income is distributed. |
|
|
Term
| What are two difficulties in the measurement of aggregate output using GDP? |
|
Definition
| Measured GDP does not include production in the underground economy, which is difficult to estimate. GDP also measure the value of government spending at its cost of production, which may be greater or less than its true value. |
|
|
Term
| What is the largest expenditure component of GDP? |
|
Definition
| The largest component is consumption, which represents about 2/3 of GDP. |
|
|
Term
|
Definition
| Investment is equal to private, domestic expenditure on goods and services (Y - G - NX) minus consumption. Investment includes residential investment, nonresidential investment, and inventory investment. |
|
|
Term
| Is national defense a large fraction of government spending? |
|
Definition
| National defense spending represents about 5% of GDP. |
|
|
Term
| Why does the base year matter in calculating real GDP? |
|
Definition
| GDP values production at market prices. Real GDP compares different years' production at a specific set of prices. These prices are those that prevailed in the base year. Real GDP is therefore a weighted average of invidual production levls. The weights are determined according to prevailing relative prices in the base yar. Because relative prices changer over time, comparisons of real GDP across time can differ according to the chosen base year. |
|
|
Term
| Explain what chain-weighting is. |
|
Definition
| Chain-weighting directly compares production levels only in adjacent years. The price weights are determined by averaging the prices of the individual goods and services over the two adjacent years. |
|
|
Term
| Explain three problems in the measurement of real GDP. |
|
Definition
| Real GDP is difficult to measure due to changers over time in relative prices, difficulties in estimating the extent of quality changes, and how one estimates the value of newly introduced goods. |
|
|
Term
| What are the differences and similarities among private sector saving, government saving, and national saving? |
|
Definition
| Private saving measures additions to private sector wealth. Government saving measures reduction in government debt (increases in government wealth). National saving measures additions to national wealth. National saving is equal to private saving plus government saving. |
|
|
Term
| What are the two ways in which national wealth is accumulated? |
|
Definition
| National wealth is accumulaeted as increases in the domestic stock of capital (domestic investment) and increases in claims again foreigners (the current account surplus). |
|
|
Term
| Give two reasons the unemployment rate may mismeasure the degree of labor market tightness. |
|
Definition
| Measured unemployment excldes discouraged workers. Measured unemployment only accounts for the number individuals unemployed, without reference to how intensively they search for new jobs. |
|
|
Term
|
Definition
| an economy that does not trade with the rest of the world |
|
|
Term
|
Definition
| an economy that engages in trade with the rest of the world |
|
|
Term
|
Definition
| goods that it is difficult or impossible for the private sector to provide, for example, national defense |
|
|
Term
|
Definition
| a variable determined outside the the model developed in chapter 5 |
|
|
Term
|
Definition
| a variable that the the model developed in chapter 5 determines |
|
|
Term
| governmenet budget constraint |
|
Definition
| an eqn describing the sources and uses of government revenues |
|
|
Term
|
Definition
| the government's choices over government expenditures, taxes, transfers, and government borrowing |
|
|
Term
|
Definition
| a state of the economy where prices and quantities are such that the behavior of price-taking consumers and firms in consistent. |
|
|
Term
|
Definition
| when supply equals demand in a particular market or markets |
|
|
Term
| production possibilities frontier (PPF) |
|
Definition
| the boundary of a set that describes what consumption bundles are technologically feasible to produce |
|
|
Term
| marginal rate of transformation |
|
Definition
| minus the slope of the PPF, or the rate at which one good in the economy can be technologically exchanged for another. |
|
|
Term
|
Definition
| a state of the economy that cannot be improved on by making one consumer better off without making another worse off. |
|
|
Term
| 1st fundamental theorem of welfare economics (or first welfare theorem) |
|
Definition
| Result stating that, under certain conditions, a competitive equilibrium is Pareto optimal |
|
|
Term
| 2nd fundamental theorem of welfare economics (or second welfare theorem) |
|
Definition
| Result stating that , under certain conditions, a Pareto optimum is a competitive equilibrium. |
|
|
Term
|
Definition
| The effect an action taken by an economic agent has on another economic agent or agents, where the agent performing the action does not take into account this effect on others. |
|
|
Term
|
Definition
| A tax, such as an income tax, that creates a difference between the effective prices faced by buyers and sellers of some good. |
|
|
Term
|
Definition
| The displacement of private expenditures by government purchases |
|
|
Term
|
Definition
| Typically describes macroeconomic effects that occur with a year's time. |
|
|
Term
|
Definition
| Typically describes macroeconomic effects that occur beyond a year's time. |
|
|
Term
| Real business cycle theory |
|
Definition
| A theory postulating that the primary cause of aggregate fluctuation is fluctuations in total factor productivity |
|
|
Term
| Intertemporal substitution of labor |
|
Definition
| The substitution of labor ver time by a worker in response to movements in real wages; |
|
|
Term
| Why is it useful to study a close economy the model developed in chapter 5? |
|
Definition
| A closed economy is easier to work with. Opening the economy does not change most of the properties of an economy. The closed economy is the correct model for the world as a whole. |
|
|
Term
| What is the role of the government in the one-period closed-economy model? |
|
Definition
| Government levies taxes and purchases consumption goods. |
|
|
Term
| Can the government run a deficit in the one-period model? Why or why not? |
|
Definition
| In a one-period model, there can be no borrowing or lending. There is therefore no way to finance a government deficit. |
|
|
Term
| What are the endogenous variables in the model developed in chapter 5? |
|
Definition
| Endogenous variables: C (what is spent on consumption goods), N^S (labor supply), N^d (), T (real quantity of taxes represented as lump-sum amnt), Y (agg real income), and w (mrkt real wage) |
|
|
Term
| What are the exogenous variables in the model developed in chapter 5? |
|
Definition
| Exogenous variables: G (government expenditures), z (total factor productivity), K (capital stock) |
|
|
Term
| What are the four conditions that a competitive equilibrium must satisfy in the model developed in chapter 5? |
|
Definition
| The representative consumer chooses C and N^s to maximize utility. The representative firm chooses N^d to maximize profits. Market-clearing: N^s = N^d = N. Governemtn budget constraint: T= G |
|
|
Term
| What is the economic significant of the slope of the production possibilities frontier? |
|
Definition
| The slope of the PPF is equal to -MP_N. The slope of the PPF is also identified as -MRT_{I,C}, i.e. the marginal rate of transformation betweeen leisure and consumption. |
|
|
Term
| Why is the competitive equilibrium inthe model developed in chapter 5 Pareto optimal? |
|
Definition
| The competitive equilibruium is Pareto optimal because it lies at a tangency point between the PPF and a representative consumer's indifference curve. |
|
|
Term
| Explain the difference between the fist and second welfare theorems. Why is each useful? |
|
Definition
| The first thm, a competitive equilibrum can be Pareto optimal, assures that the competitive equilibrium is a good outcome. The second thm, a Pareto optimum is a competitive equilibrium, allows us to directly analyze Pareto optima with the assurance that these points are also competitive equilibriums. Useful because Pareto Opitma are easier to work with than competitive equilibriums. |
|
|
Term
| Give three reasons that an equilibrum might not be Pareto optimal. |
|
Definition
| Externalities, noncompeitive behaiovr, and distoring taxes. |
|
|
Term
| What are the effects of an increase in private purchases? |
|
Definition
|
|
Term
| Why does government spending crowd out government purchases? |
|
Definition
| Government competees with the private sector in buying goods. An increase in government spending implies anegative wealth effect, which results in lower consumption. |
|
|
Term
| what is the wealth effect? |
|
Definition
| a decrease in the price level makes consumers feel more wealthy, which in turn encourages them to spend more. The increase in consumer spending means a larger quantity of goods and services demanded. |
|
|
Term
| What are the equilibrium effects of an increase in total factor productivity? |
|
Definition
|
|
Term
| Explain why employment may rise or fall in response to an increase in total factor productivity. |
|
Definition
| The substitution effect of an increase in z (total factor productivity) is that the representative consumer works more hours. The income effect of an increase in z is that the representative household works more hours. The sign of the net effect is ambiguous. |
|
|
Term
|
Definition
| a decision made by a consumer or firm for only one time period |
|
|
Term
|
Definition
| a decision made by a consumer or firm for more than one time period |
|
|
Term
|
Definition
| a single good that represents an aggregation of all consumer goods in the economy |
|
|
Term
|
Definition
| time spent not working in the market |
|
|
Term
|
Definition
| time spent not working in the market |
|
|
Term
|
Definition
| a stand-in for all consumers in the economy |
|
|
Term
|
Definition
| A function that captures a consumer's preference over goods. |
|
|
Term
|
Definition
| a given consumption-leisure combination. |
|
|
Term
|
Definition
| a good for which consumption increases as income increases |
|
|
Term
|
Definition
| a good for which consumption decreases as income increases |
|
|
Term
|
Definition
| a set of indifference curves representing a consumer's preferences over goods; has the same information as the utility function |
|
|
Term
|
Definition
| a set of points that represents consumption budles among which a consumer is indifferent |
|
|
Term
| marginal rate of substitution |
|
Definition
| minus the slope of an indifference curve, or the rate at which the consumer is just willing to trade one good for another |
|
|
Term
|
Definition
| actions taken by a consumer or firm if market prices are outside its control |
|
|
Term
|
Definition
| an exchange of goods for goods |
|
|
Term
|
Definition
| condition that hours worked plus leisure time sum to total time available to the consumer |
|
|
Term
|
Definition
| the wage rate in units of the consumption good |
|
|
Term
|
Definition
| the good in which prices are denominated |
|
|
Term
|
Definition
| Profits of firms that are distributed to the consumer, who owns the firms |
|
|
Term
|
Definition
| A tax that is unaffected by the actions of the consumer or firm being taxed |
|
|
Term
|
Definition
| Condition that consumption equals wage income plus nonwage income minus taxes. |
|
|
Term
|
Definition
| Describes a consumer who can make an informed optimizing decision |
|
|
Term
| Optimal consumption bundle |
|
Definition
| The consumption bundle for which the consumer is as well off as possible while satisfying the budget constraint |
|
|
Term
|
Definition
| the price of a good in units of another good |
|
|
Term
|
Definition
| the effect on the consumer's optimal consumption bundle due to a change in real disposable income, holding prices constant |
|
|
Term
|
Definition
| The effect on the quantity consumed of a good of a price changed, due to having effectively different income |
|
|
Term
|
Definition
| The effect on the quantity consumed of a good of a price change, holding the consumer's welfare constant |
|
|
Term
|
Definition
| a relationship describing the quantity of labor supplied for each level of the real wage |
|
|
Term
|
Definition
| two goods that are always consumed in fixed proportions |
|
|
Term
|
Definition
| two goods with a constant marginal rate of substitution between them. |
|
|
Term
|
Definition
| a function describing the technological possibilities for converting factor inputs into output |
|
|
Term
| Total factor productivity |
|
Definition
| a variable in the production function that makes all factors of production more productive if it increases. |
|
|
Term
|
Definition
| the additional output produced when another unit of a factor of production is added to the production process |
|
|
Term
| Constant returns to scale |
|
Definition
| a property of the production technology whereby if the fir increases all inputs by a factor x, this increases output by the same factor x |
|
|
Term
| Increasing returns to scale |
|
Definition
| a property of the production technology whereby if the fir increases all inputs by a factor x, this increases output by more than the factor x. |
|
|
Term
| Decreasing returns to scale |
|
Definition
| a property of the production technology whereby if the fir increases all inputs by a factor x, this increases output by less than the factor x. |
|
|
Term
|
Definition
| A stand-in for all firms in the economy |
|
|
Term
| Cobb-Douglas production function: |
|
Definition
| a particular mathematical form for the production function that fits U.S. aggregate data well. |
|
|
Term
|
Definition
| a measure of total factor productivity obtained as a residual from the production function, given measure of aggregate output, labor input, and capital input. |
|
|
Term
| What goods do consumers consume in the macroeconomic model developed in chapter 4? |
|
Definition
| Consumers consume an aggregate consumption good and leisure. |
|
|
Term
| From chapter 4, how are a consumer's preferences over goods represented? |
|
Definition
| Consumers' preferences are summarized in a utility function. |
|
|
Term
| What three properties do indifference curves have? How are these properties associated with the properties of the consumer's preferences? |
|
Definition
The first property is that more is always preferred to less. The property assures us that a consumption bundle wirth more of one good and no less of the other good than any second budle will alwys be preferred to the second bundle.
The second property is that a consumer likes diversity in his or her consumption bundle. This property assures us that a linear combination of two consumption bundles will always be preffered to the two original bundles.
The third property is that both consumption and leisure are normal goods. This property assures us that an increase in a consumer's income will always induce the individual to consume more of both consumption and leisure. |
|
|
Term
| What two properties do indifference curves have? How are these properties associated with the properties of the consumer's preferences? |
|
Definition
| The first property of indifferene curves is that they are downward sloping. This property is consequene of the property that more is always preferred to less. The second property of indiffernce cufeves is that they are bowed toward the origin. This property is a direcdt consequence of consumers' preference for diversity. |
|
|
Term
| What is the representative consumer's goal? |
|
Definition
| Consumers maximize the amount of utility they can derive from their given amount of available resources. |
|
|
Term
| When the consumer choose his or her optimal consumption bundle while respecting his or her budget constraint, what condition is satisfied? |
|
Definition
| The optimal bundle has the property that it represents a point of tangency of the budget line with the indifference cureve. An equivalent property is that the marginal rate of substitution of leisure for consumption and leisure is equal to the real wage. |
|
|
Term
| How is the representative consumer's behavior affected by an increase in real dividend income? |
|
Definition
| In response to an increase in dividend income (~before tax~), the consumer will consume more goods and more leisure. |
|
|
Term
| How is the representative consumer's behavior affected by an increase in real taxes? |
|
Definition
| In response to an increase in the real value of a lump-sum tax, the consumer will consume less goods and less leisure. |
|
|
Term
| WHy might hours worked by the representative consumer decrease when the real wage increases? |
|
Definition
| An increase in the real wage makes the consumer more well off. As aresult of this pure income effect, the consumer wants more leisure. Alternatively, the increase in the real wage induces a substituion effect in which the consumer is willing to consume less leiusre in exchange for working more hours (consuming less leisure). The net effect of these two competing forces is theoretically ambiguous. |
|
|
Term
| What is the representative firm's goal? |
|
Definition
| The representative firm seeks to maximize profits. |
|
|
Term
| No. Exact descriptions of reality are too complicated to provide useful results. Why is the marginal product of labor diminishing? |
|
Definition
| As the amount of labor is increased, holding the amount of capital constant, each worker gets a smaller share of the fixed amount of capital, and there is a reduction in each worker’s marginal productivity. |
|
|
Term
| What are the effects on the production function of an increase in total factor productivity? |
|
Definition
| An increase in total factor productivity shifts the production function upward. |
|
|
Term
| Explain why the marginal product of labor curve is the firm's labor demand curve. |
|
Definition
| The representative firm’s profit is equal to its production (revenue measured in units of goods) minus its variable labor costs (the real wage times the amount of labor input). A unit increase in labor input adds the marginal product of labor to revenue and adds the real wage to labor costs. The amount of labor demand is that amount of labor input that equates marginal revenue with marginal labor costs. This quantity of labor, labor demand, can simply be read off the marginal product of labor schedule. |
|
|
Term
|
Definition
| A description of consumers and firms, their objectives and constraints, and how they interact |
|
|
Term
|
Definition
| The increase in a nation's productive capacity and average standard of living that occurs over a long period of time. |
|
|
Term
|
Definition
| Short-run ups and downs, or booms and recessions, in aggregate economic activity. |
|
|
Term
| Gross national product (GNP) |
|
Definition
| The quantity of goods and services produced by a country's residents during some specified period of time |
|
|
Term
|
Definition
| The smooth growth path around which an economic variable cycles. |
|
|
Term
|
Definition
| artificial devices that can replicate the behavior of reals systems |
|
|
Term
|
Definition
| the process by which economic agents (firms and consumers) do the best they can given the constraints they face |
|
|
Term
|
Definition
| the situation in an economy when the actions of all the consumers and firms are given the constraints they face |
|
|
Term
|
Definition
| equilibrium in which firms and households are assumed to be price-takers, and market prices are such that the quantity supplied equals the quantity demanded in each market in the economy |
|
|
Term
| Rational expectations revolution |
|
Definition
| Macroeconomics movement that occured in the 1970s, introducing more microeconomics into macroeconomics |
|
|
Term
|
Definition
| The idea that macroeconomic policy analysis can be done in a sensible way only if microeconomic behavior is taken seriously. |
|
|
Term
|
Definition
| Models that describe the economic mechanism determining the rate of economic growth |
|
|
Term
|
Definition
| Describes macroeconomists who are followers of J.M. Keynes and who see an active role for government in smoothing business cycles. |
|
|
Term
|
Definition
| In this theory, developed by Milton Friedman and Robert Lucas, monetary factors are the primary cause of business cycles, and the government should not be active smoothing cycles |
|
|
Term
| Real business cycle theory |
|
Definition
| Initiated by Finn Kydland and Edward Prescott, this theory implies that business cycles are caused primarily by shocks to technology and that the government should play a passive role over the businss cycle. |
|
|
Term
| Keynesian coordination failure theory |
|
Definition
| A modern incarnation of Keynesian business cycle theory positing that business cycles are caused by self-fulfilling waves of optimism and pessimism, which may be countered with government policy. |
|
|
Term
|
Definition
| The rate of change in the average level of prices over time |
|
|
Term
|
Definition
| The central bank of the United States |
|
|
Term
|
Definition
| Theory that explains unemployment in terms of the costs of searching for job offers |
|
|
Term
|
Definition
| Theory positing that workers are unemployed due to an excess supply of labor brought about when firms pay high wages to induce their workers to shirk. |
|
|
Term
|
Definition
| A positive relationship between the deviation of aggregate output from trend and inflation rate. |
|
|
Term
| Average labor productivity |
|
Definition
| The quantity of aggregate output produced per worker |
|
|
Term
| Gross domestic product (GDP) |
|
Definition
| The quantity of goods and services produced within a country's borders over a specified period of time |
|
|
Term
|
Definition
| The period of low productivity growth occurring from the late 1960s until the early 1980s |
|
|
Term
|
Definition
| The process by which government spending reduces private sector expenditures on investment and consumption |
|
|
Term
|
Definition
| The difference between taxes and government spending |
|
|
Term
|
Definition
| Identical to the government surplus |
|
|
Term
|
Definition
| The negative of the government surplus |
|
|
Term
| Ricardian equivalence theorem |
|
Definition
| Theory asserting that a change in taxation by the government has no effect. |
|
|
Term
|
Definition
| The average level of prices |
|
|
Term
|
Definition
| The interest rate in money terms |
|
|
Term
|
Definition
| Approximately equal to the nominal interest rate minus the expected rate of inflation |
|
|
Term
|
Definition
| Exports minus imports plus net factor payments to domestic residents from abroad |
|
|
Term
|
Definition
| Exports of goods and servies minus imports of goods and services |
|
|
Term
|
Definition
| These are the payments received by domestic factors of production from abroad, mins the payments to foreign factors of production from domestic sources. |
|
|
Term
|
Definition
| Situation in which the current account surplus is negative |
|
|
Term
|
Definition
| The phenomenon during the late 1980s when the U.S. government was running a deficit at the same time that the United States was running a current account deficit. |
|
|
Term
| What are the primary defining characteristics of macroeconomics? |
|
Definition
| Macroeconomics focuses on questions that affect large numbers of individuals, including those in other nations. |
|
|
Term
| What makes macroeconomics different from microeconomics? What do they have in common? |
|
Definition
| Microeconomists study the behavior of individual households and firms. Because the economy as a whole is comprised of a large number of households and firms, interactions at the aggregate level are the results of decisions of individual households and firms. |
|
|
Term
| How much richer was the average American in 1997 than in 1900? |
|
Definition
| The average American was eight times as rich. |
|
|
Term
| What are two striking business cycle events in the United States during the last 100 years? |
|
Definition
| The Great Depression of the 1930s and World War II. |
|
|
Term
| List six fundamental macroeconomic questions? |
|
Definition
What causes sustained economic growth?
Could economic growth continue indefinitely, or is there some limit to growth?
Is there anything that governments can or should do to alter the rate of economic growth? What causes business cycles?
Could the dramatic decreases and increases in economic growth that occurred during the Great Depression and
World War II be repeated?
Should government act to smooth business cycles? |
|
|
Term
| IN a graph of the natural logarithm of an economic time series, what does the slope of the graph represent? |
|
Definition
| The slope represents the exponential growth rate. |
|
|
Term
| What is the difference between the trend and the business cycle component of an economic time series? |
|
Definition
| The trend in a series is a smooth curve fit to the data. |
|
|
Term
| Explain why experimentation is difficult in macroeconomics. |
|
Definition
| Experimentation may cause irreparable harm to a large number of people. |
|
|
Term
| Why should a macroeconomic model be simple? |
|
Definition
| A model must be simple to capture the essential features of the world that are relevant to problems at hand. |
|
|
Term
| Should a macroeconomic model be an exact description of the world? Explain why or why not. |
|
Definition
| No. Exact descriptions of reality are too complicated to provide useful results. |
|
|
Term
| What are the five elements that make up the basic structure of a macroeconomic model? |
|
Definition
| The consumers and firms that interact in the economy. The set of goods that consumers wish to consume. Consumers’ preferences over goods. The technology available to firms for producing goods. The resources available. |
|
|
Term
| Why can macroeconomic models be useful? How do we determine whether or not they are useful? |
|
Definition
| Macroeconomic models help us answer questions about how the economy behaves. Models are useful if they reasonably and accurately explain the phenomenon of interest (~i.e. you wait a long time~). |
|
|
Term
| Explain why a macroeconomic model should be built from microeconomic principles. |
|
Definition
| Macroeconomic behavior is the result of many microeconomic decisions. To answer policy questions, we need to know whether a proposed policy change is likely to affect the behavior of the individual decision makers. |
|
|
Term
| What are the four theories of the business cycle that we will study? |
|
Definition
Money surprise theory
Real business cycle theory
Keynesian coordination failure theory
Keynesian sticky wage model |
|
|
Term
| What are two possible cause of the productivity slowdown? |
|
Definition
| True productivity continued to rise, but was imprecisely measured. Time was required for the economy to adjust to new technology. |
|
|
Term
| What is the principle effect of an increase in government spending? |
|
Definition
| An increase in government spending consumes resources that might otherwise be used by the private sector. |
|
|
Term
| Why might a decrease in taxes have no effect? |
|
Definition
| Holding government spending fixed, a cut in taxes today must be offset by a tax increase in the future. Such a policy change should not affect private decisions to purchase goods and services. |
|
|
Term
| What is the cause of inflation in the long run? |
|
Definition
| The cause of inflation is excessive growth in the money supply. |
|
|
Term
| What effect does an increase in the relative price of energy have on aggregate economic activity? |
|
Definition
| The nominal interest rate expresses dollar interest payments as a percentage of the amount borrowed. The real interest rate measures that amount of purchasing power that will be required to repay a loan. The (expected) real interest rate is approximately equal to the nominal interest rate minus the (expected) rate of inflation. |
|
|
Term
| How are the government surplus and the current account surplus connected? |
|
Definition
| The nominal interest rate expresses dollar interest payments as a percentage of the amount borrowed. The real interest rate measures that amount of purchasing power that will be required to repay a loan. The (expected) real interest rate is approximately equal to the nominal interest rate minus the (expected) rate of inflation. |
|
|
Term
| How are the government surplus and the current account surplus connected? |
|
Definition
| The nominal interest rate expresses dollar interest payments as a percentage of the amount borrowed. The real interest rate measures that amount of purchasing power that will be required to repay a loan. The (expected) real interest rate is approximately equal to the nominal interest rate minus the (expected) rate of inflation. |
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Term
| What are four factors that determine the quantity of unemplouyment? |
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Definition
The level of aggregate economic activity
The structure of the population
Government intervention
Sectoral shifts |
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Term
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Definition
| weighted average of the prices of a set of the goods and services produced in the economy over a period of time (used to measure inflation rate, which is the rate of change in the price level from one period of time to another) |
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