Government objective- inflation/deflation Flashcards

1
Q

what is inflation

A

sustained increase in the general price level

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2
Q

what is hyper inflation

A

very extreme inflation. has to be above at least 50%

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3
Q

how many types of inflation do we have

A

2 types
demand pull inflation.
cost push inflation

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4
Q

what is deflation

A

when there is a sustained decrease in the general price level

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5
Q

deflationary spiral

A

The spiral begins with deflation which is where there is a sustained fall in the general price level. Consumers notice the falling prices and decide to delay their purchases and wait for prices to fall further.

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6
Q
A
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