Focus on Economic Data: The Inflation Rate - August 15, 2003
Glossary terms from:
One of many choices or courses of action that might be taken in a given situation.
Monetary or non-monetary gain received because of an action taken or a decision made.
Any activity or organization that produces or exchanges goods or services for a profit.
In the context of credit transactions, capacity is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be, as determined by the borrower's current and future earnings relative to current debt. High earnings and low debt, for example, indicate a strong capacity to make payments on the loan in question.
Consumer Price Index (CPI)
A price index that measures the cost of a fixed basket of consumer goods and services and compares the cost of this basket in one time period with its cost in some base period. Changes in the CPI are used to measure inflation.
People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.
Spending by households on goods and services. The process of buying and using goods and services.
An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.
A sustained decrease in the average price level of all the goods and services produced in the economy.
The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.
Inflation caused by increasing demand for output or "too much money chasing too few goods."
Tangible objects that satisfy economic wants.
Individuals and family units that buy goods and services (as consumers) and sell or rent productive resources (as resource owners).
Accommodation in houses, apartments, etc.
Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.
A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).
Money paid regularly, at a particular rate, for the use of borrowed money.
The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.
The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.
The quantity and quality of human effort available to produce goods and services.
An economy that relies on a system of interdependent market prices to allocate goods, services, and productive resources and to coordinate the diverse plans of consumers and producers, all of them pursuing their own self-interest.
Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.
Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.
The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.
The weighted average of the prices of all goods and services in an economy; used to calculate inflation.
People and firms that use resources to make goods and services.
A good or service that can be used to satisfy a want.
A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.
In a credit arrangement, the total amount spent during the billing cycle.
The amount of goods and services that a monetary unit of income can buy.
The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.
Payments for labor resources; unlike wages, not explicitly based on the number of hours worked. See also Wages.
Activities performed by people, firms or government agencies to satisfy economic wants.
A period of time long enough for existing firms to change some--but not all--of the resources they use.
A federal system of old-age, survivors', disability and hospital care (Medicare) insurance which requires employers to withhold (or transfer) wages from employees' paychecks and deposit that money in designated accounts.
The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.
Compulsory payments to governments by households and businesses.
The number of people without jobs who are actively seeking work.
Value of Money
The ability of money to buy goods and services. A wide variety of items has been used as money. Money need not have any intrinsic value. It is people's willingness to accept it that gives it value.