# Key Concepts

- Page ID
- 11793

**Variables**: measures that can take on different sizes.

**Data**: recorded values of variables.

**Time series data**: a set of measurements made sequentially at different points in time.

**High (low) frequency data** series have short (long) intervals between observations.

**Cross-section data**: values for different variables recorded at a point in time.

**Longitudinal data** follow the same units of observation through time.

**Index number**: value for a variable, or an average of a set of variables, expressed relative to a given base value, as seen in Equation 2.2:

\(\text{Value of index} = \displaystyle\frac{\text{Absolute value in year}\,t} {\text{Absolute value in base year}} \times \:100.\)

\(\textbf{Percentage change}= \displaystyle\frac{\text{change in values}} {\text{original value}} \times \:100.\)

**Consumer price index**: the average price level for consumer goods and services.

**Inflation rate**: the annual percentage increase in the consumer price index.

**Deflation rate**: the annual percentage decrease in the consumer price index.

**Real price index**: a nominal price index divided by the consumer price index, scaled by 100.

**Nominal price index**: the current dollar price of a good or service.

**Nominal earnings**: earnings measured in current dollars.

**Real earnings**: earnings measure in constant dollars to adjust for changes in the general price level.

**Scatter diagram **plots pairs of values simultaneously observed for two variables.

**Econometrics** is the science of examining and quantifying relationships between economic variables.

**Regression line **represents the average relationship between two variables in a scatter diagram.

**Positive economics** studies objective or scientific explanations of how the economy functions.

**Normative economics** offers recommendations that incorporate value judgments.

**Economic equity** is concerned with the distribution of well-being among members of the economy.