Definitions/meaning
an increase in demand in the economy leads to rising prices.
What is demand-pull inflation?
an increase in the prices of the factors of
production.
What is cost-push inflation?
As prices rise, the value of money decreases, meaning consumers can buy less with the same amount of money.
What is Reduced purchasing power?
The way to measure Inflation from year to year?
What is the retail price index?
As prices rise, the value of money decreases, meaning consumers can buy less with the same amount of money.
What is reduced purchasing power?
Employers might be forced to reduce the quantity of labour employed
What is unemployment?
labour, land, capital and entrepreneurship
What is factors of production?
Increasing world prices will result in the domestic prices of these imported goods rising.
Central banks may raise __________ to combat inflation.
What is interest rates?
the study of the economy as a whole, rather than the individual markets.
What is Macroeconomics?
too much money in supply increases aggregate demand while output remaining constant, causes an increase in prices.
What is increasing money supply?
Higher inflation can make a country’s exports more expensive and imports cheaper, affecting the trade balance.
What is international competitiveness?
prices are stable?
What is one goal of the government?
Natural disasters or geopolitical tensions can reduce supply and drive up prices.
What is supply-chain disruption/ cost-push inflation?
Inflation can erode savings and fixed incomes
What is income redistribution?