12 Economic Changes and Cycles

An increase in the price level, or average level of prices

• Inflation

• velocity

• deflation

• absolute real economic growth

An increase in the price level that originates on the demand side of the economy

• demand-side inflation

• supply-side inflation

• velocity

• deflation

An increase in the price level that originates on the supply side of the economy

• demand-side inflation

• supply-side inflation

• velocity

• deflation

The average number of times a dollar is spent to buy final goods and services in a year

• demand-side inflation

• supply-side inflation

• velocity

• deflation

A theory that predicts that changes in the price level will be strictly proportional to changes in the money supply

• Simple quantity theory of money

• Veloctiy

• Supply side inflation

• Real absolute economic growth

To try to avoid or lessen a loss by taking some counterbalancing action

• hedge

• velocity

• inflation

• deflation

A decrease in the price level, or average level of prices.

• hedge

• velocity

• inflation

• deflation

Recurrent swings (up and down) in real GDP

• business cycle

• absolute real economic growth

• recession

• inflation

A slowdown in the economy marked by real GDP falling for two consecutive quarters

• business cycle

• absolute real economic growth

• recession

• inflation

An increase in real GDP from one period to the next

• absolute real economic growth

• inflation

• deflation

• per capita real economic growth