Inflation Flashcards
1
Q
Define “inflation”.
A
Inflation is the persistent (continuous) and appreciable (always increasing) rise in the general level of prices of goods & services over time.
2
Q
How is inflation measured?
A
Inflation is measured through the Consumer Price Index (CPI), which measures the prices of 11 categories of goods & services required by an average Australian household.
3
Q
What is the target rate of inflation in Australia? What is the current inflation rate?
A
- Target rate of inflation is 2 to 3%
- The current rate of inflation in Australia is 3.6%
4
Q
Who sets the target inflation rate in Australia?
A
RBA (Reserve Bank of Australia)
