Macro 9

Question 1

What is inflation ?

Answer 1

the sustained increase in the average price of goods and services over a period of time.

Question 2

What is deflation ?

Answer 2

a fall in the average price of goods and services over a period of time.

Question 3

What is hyperinflation ?

Answer 3

when prices rise extremely quickly and money rapidly loses value.

Question 4

What is disinflation ?

Answer 4

the average price of goods and services is still rising but at a slower rate than previous periods.

Question 5

What is demand pull inflation ?

Answer 5

When more people want to buy goods than what is available, prices go up. This might happen due to increased consumer spending, government expenditure, or investments.

Question 6

What is cost push inflation ?

Answer 6

This type of inflation happens when the costs of production increase, leading to decreased supply.

Question 7

What is the wage price spiral ?

Answer 7

This occurs when wages increase, leading to higher spending power. This increased demand can push prices up

Question 8

What are monetary factors ?

Answer 8

Inflation can also be caused by an increase in the money supply.

Question 9

What effect does government spending have on inflation ?

Answer 9

Certain government policies can also lead to inflation. For example, high levels of government spending or subsidies can increase the overall demand in the economy

Question 10

what effect does Economic Policies of Major Economies have on inflation

Answer 10

Decisions and policies in major economies, like the United States or the European Union, can have a ripple effect.

Question 11

What effect does International Lending and Investment Policies have on inflation

Answer 11

Policies by international financial institutions or major foreign investors can influence inflation.