objectives and indicators

Question 1

what are the definitions of inflation and deflation

Answer 1

inflation - the persistent rising price of goods and services across a whole economy
deflation - the persistent falling price of goods and services across an entire economy. this means that the price level can go negative

Question 2

what is disinflation

Answer 2

disinflation is where the price level of goods and services is falling across an economy however inflation still remains positive

Question 3

what are monetary and fiscal policies

Answer 3

monetary polices is when the government and the back of england you monetary instruments such as interest rates to achieve government objectives
fiscal policies - the use of solely government spending and taxation to achieve government objectives

Question 4

budget deficit

Answer 4

this is where government spending is greater than government revenue
this is revenue from taxation (income, VAT) and national insurance

Question 5

how can we measure GDP

Answer 5

national income
total national expenditure
total national output