Inflation Flashcards
1
Q
Outline what is meant by inflation
A
Inflation is when an economy’s price of goods and services increases over time
2
Q
Explain how inflation is measured
A
Year 2 prices divided by year 1 prices multiplied by 100
3
Q
Discuss the two different causes of inflation
A
Demand pull is when the demand for goods and services increases to more than can be produced. Cost push is when the supply for goods and services which can be produced falls.
