| A | B |
|---|
| Base Year | the year all the other years are compared with |
| Weighting | when the measurement of price changes changes takes into account the fact that more is spent on some items than others |
| Consumer Price Index | price index that measures changes in prices of goods and services bought by domestic households |
| Producer Price Index - Outputs | price index that measures changes in the prices of goods and services sold by producers |
| Producer Price Index - Inputs | price index that measures changes in the prices of the factors of production - ie in the costs of production |
| Import Price Index | price index that measures changes in the prices of imports |
| Underlying Inflation | inflation that is likely to be permenant. Items that only have a temporary effect have been deducted from headline inflation |
| Aggregate Demand | Total demand for all goods and services in the economy |
| Cost Push Inflation | when prices rise because the costs of production of most goods rise |
| Demand Pull Inflation | when prices rise because there is an increase in Aggregate Demand |
| Inflation Psychology | when people believe inflation is going to occur and act accordingly |
