Government objective- inflation/deflation Flashcards
1
Q
what is inflation
A
sustained increase in the general price level
2
Q
what is hyper inflation
A
very extreme inflation. has to be above at least 50%
3
Q
how many types of inflation do we have
A
2 types
demand pull inflation.
cost push inflation
4
Q
what is deflation
A
when there is a sustained decrease in the general price level
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.
6
Q
A