inflation and deflation

Question 1

what is inflation

Answer 1

is a sustained rise in an economies general price level - the price of goods and services are going up over time

Question 2

what is deflation

Answer 2

sustained period when the general price level for goods and services is falling.

Question 3

what is disinflation

Answer 3

is a fall in the rate of inflation but doesn’t bring about price deflation - A slowdown of the rate of increase in prices

Question 4

what is hyperinflation

Answer 4

is a phase of extremely rapid inflation (usually due to overprinting money or a collapse in real output/supply)

Question 5

what is stagflation

Answer 5

stagnant (slow) economic growth rising unemployment and high rising inflation

Question 6

what is the wage-price spiral

Answer 6

when workers bid for higher wages as their real income is eroded by fast rising prices - can lead to cost push inflation in an economy