Unformatted text preview: could buy a large scoop for a nickel. You are probably not surprised at the increase in the price of ice cream. In our economy, most prices tend to rise over time. This increase in the overall level of prices is called inflation. Earlier in the book we examined how economists measure the inflation rate as the percentage change in the consumer price index, the GDP deflator, or some other index of the overall price level. These price indexes show that, over the past 60 years, prices have risen on average about 5 percent per year. M O N E Y G R O W T H A N D I N F L A T I O N...
View Full Document
- Spring '10
- Inflation, ice cream, inflation results