Price Stability

Question 1

What is Inflation

Answer 1

Inflation is a persistent or continuing rise in the average price level of the economy

Question 2

What is the goal for inflation

Answer 2

2%

Question 3

What is deflation and disinflation

Answer 3

Deflation refers to falling price levels or in other words the opposite to inflation (rising prices) Disinflation doesn’t refer to the direction of prices (as inflation and deflation do), but rather the rate of change: it’s a slowdown in the rate of inflation.
The ONS measure inflation rate.

Question 4

What is the basket of goods

Answer 4

750 goods or services that change to reflect buying habits, to calculate inflation