1. How does GDP measure the state of the economy?
Inflation & Deflation
How does GDP measure the state of the economy?

3. REAL VS. NOMINAL

4. Deflation & Inflation
Deflation - decrease in the average price level of all the goods and services produced in the economy
Inflation - increase in the average price level of all the goods and services produced in the economy
causes major economic problems for society
makes it more difficult to lend, save, and make future decisions

6. Consumer Price Index (CPI)
Consumer Price Index (CPI) - 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 used to measure inflation

7. How Fast Are Prices Rising?

8. Money - 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
Unanticipated Inflation - an increase in the general level of prices that was not expected by decision makers

9. FRED Graph