Monetary and fiscal policy are tools used to influence national economic activity. Monetary policy is managed by central banks, fiscal policy by governments. Both policies work together to manage economy and businesses
CPI tracks average price changes for urban consumers' basket of goods and services. Measures inflation from consumer perspective, affecting purchasing power. Used to adjust income, taxes, and monetary policy decisions. Collects data from 23,000 sources monthly, including 80,000 prices
Disposable income is money left after taxes and mandatory charges are deducted. Calculated by subtracting taxes from total income. Includes both necessary spending and discretionary spending
CCI measures economic growth through consumer spending and confidence. Index changes of 5% or more indicate significant economic shifts. Manufacturers, retailers, banks and government monitor CCI changes
Disinflation is a decrease in the rate of inflation in a nation's GDP. It is the opposite of reflation. Can lead to deflation if inflation starts low. Example: 1% monthly decrease from 5% to 4% shows 1% disinflation. Example: 3% monthly decrease from 1% to -2% shows 3% disinflation
Crowding out occurs when government involvement affects market economy's supply or demand. Idea has been discussed since 18th century. Modern global capital markets challenge simple crowding out model