Chapter 3 vocab words

Inflation

is an increase in the general level of prices for goods and services.

Disinflation

Reflation

occurs when prices are high but then drop due to lower demand.

Hyperinflation

when prices are rising so rapidly they are out of control.

Deflation

is the lowering of overall price levels.

Deman-pull inflation

occurs when consumers want to buy more goods and services than producers supply.

Cost-push inflation

occurs when producers raise prices because their costs to create products are rising.

Productivity

is a measure of the efficiency with which goods and services are made.

Real-cost inflation

as resources diminish or become harder to get, prices rise.

Time value of money

is a concept that says a dollar you will receive in the future is worth less than a dollar you receive today.

Cost-plus pricing

computes the total cost of making and delivering a product.

Value-based pricing

the seller tries to determine how much consumers will be willing to pay for the product.

Market-based pricing

the price is set to be competitive with prices of similar products currently being sold.

Economizing

when they are saving as much as possible and spending money only when necessary.

Optimizing

getting the highest value for the money spent.

Advertising

is a method of informing consumers and promoting and selling products.

Target audience

is a specific group of people who are likely to be watching and are likely to buy the product.