Inflation Flashcards
1
Q
what is inflation
A
it is the general rise in average prices across the economy
2
Q
why is having stable inflation important
A
if the rate is rising too fast, the economy cannot adapt quickly enough, this could cause many different problems, for example the value of real income could fall
3
Q
What is deflation
A
a persistent or continuing fall in the average price level
4
Q
what is disinflation
A
when the rate of inflation is falling but still positive
