Unemployment and Inflation Who Counts in Unemployment?

Inflation

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  Hyperinflation: an extremely high rate of inflation, in the 100s or 1000s percent per year
  
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  Inflation: a general and ongoing rise in the level of prices in an economy
  

Table 1. Price Comparisons, 1970 and 2014

Items	1970	2014
Pound of ground beef	$0.66	$4.16
Pound of butter	$0.87	$2.93
Movie ticket	$1.55	$8.17
Sales price of new home (median)	$22,000	$280,000
New car	$3,000	$32,531
Gallon of gasoline	$0.36	$3.36
Average hourly wage for a manufacturing worker	$3.23	$19.55
Per capita GDP	$5,069	$53,041.98

Calculating Inflation with Index Numbers

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  Base Year: arbitrary year whose value as an index number is defined as 100; inflation from the base year to other years can easily be seen by comparing the index number in the other year to the index number in the base year—i.e., 100; so, if the index number for a year is 105, then there has been exactly 5% inflation between that year and the base year
  
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  Index Number: a unit-free measure of an economic indicators; index numbers are based on a value of 100, which makes it easy to measure percent changes
  
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