A model or theory is a deliberate simplification of a real situation used to get a better understanding of how reality works. It makes assumptions from which it deduces how people will behave.

Data are pieces of evidence about economic behaviour.

A behavioural law is a sensible theoretical relationship not rejected by evidence over a long period.

A time series is a sequence of measurements of the same variable at different points in time.

Cross-section data record at a point in time the way an economic variable differs across different individuals or groups of individuals.

An index number expresses data relative to a given base value.

The Consumer (Retail) Price Index is the money that must be spent to purchase the typical bundle of goods consumed by the representative household, and is a measure of the cost of living.

The inflation rate is the annual rate of change of the consumer (retail) price index.

Nominal values are measured in the prices ruling at the time of measurement. Real values adjust nominal values for changes in the price level.

The purchasing power of money is an index of the quantity of goods that can be bought for £1.

The percentage change is the absolute change divided by the original number, then multiplied by 100.

The growth rate is the percentage change per period (usually a year).

A scatter diagram plots pairs of values simultaneously observed for two different variables.

Econometrics uses mathematical statistics to measure relationships in economic data.

Other things equal is a device for looking at the relation between two variables, but remembering other variables also matter.