Chapter 19- inflation

Question 1

inflation

Answer 1

is a rise in the general level of prices and a fall in the purchasing power of money

Question 2

deflation

Answer 2

is a fall in the general level of prices and a rise in the purchasing power of money

Question 3

disinflation

Answer 3

when the rate of inflation falls

Question 4

what are the main measures of inflation in the UK

Answer 4

CPI (CONSUMER PRICE INDEX)

RPI (RETAIL PRICE INDEX)

Question 5

Real values

Answer 5

have the effect of inflation removed so they show the actual quantity of changes. using prices without modifying for inflation gives us nominal.

Question 6

what are the types of inflation

Answer 6

demand pull

cost push

Question 7

stagflation

Answer 7

a rare combination of events where inflation coincides with rising unemployment