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Income Policies: Strategies to restrict wage and price increases, ranging from "jawboning" by the president to laws that set wage and price levels.

Income Statement: An annual summary of income and expenses of a given business in order to determine the net income of the business.

Income Velocity of Money: The ratio of national income to the quantity of money in circulation; velocity measures the average number of times money changes hands in generating national income per year (monetarist theory).

Inelastic Demand: A term used when the percentage change in quantity demanded is smaller than the percentage change in price.

Indexation: Modifying contracts so that their dollar terms adjust to the inflation rate as measured in an index, such as the consumer price index.

Inflation: Increase in the overall level of prices over an extended period of time.

Interest: The annual earnings that are sacrificed when wealth is invested in a given asset or business. The interest sacrificed by investing in a given business is often called the cost of capital.

International Monetary Fund (IMF): The overseer for the exchange rate system and international monetary relations.

Inventory: A stock of goods or resources held by a buyer or seller in order to reduce the cost of exchange or production.

Investment Expenditures: Dollar expenditures by firms on capital goods (factories, office buildings and others structures, machinery and equipment, inventories and residential housing) used to produce other new goods and services.

Involuntary Unemployment: Potential workers able and willing to work at the existing market wage rate, are unable to find jobs.


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