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18 Cards in this Set
- Front
- Back
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Deflation |
A fall in the general price level |
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Inflation |
A sustained increase in the general price level |
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Consumer price index |
The headline measure of inflation, derived from movements in a weighted basket of consumer goods over a 12 month period |
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Family expenditure survey |
A representative monthly survey of UK household expenditure used to derive changes in the consumer price index |
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Cost-push inflation |
Inflation caused by economy-wide increases in production costs |
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Indirect taxes |
Taxes levied on spending on goods and services |
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Wage-price spiral |
The process whereby increases in costs, such as wages, lead to increases in prices, which in turn lead to firms' costs increasing, and so on |
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Quantity theory of money |
The theory that increases in the money supply will lead to increases in the price level |
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Fisher equation |
MV=PT |
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Velocity of circulation |
The number of times the money supply changes hands in a year |
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Hyperinflation |
Very large, rapid increases in the general price level |
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Anticipated inflation |
Where economic agents correctly predict the future rate of inflation |
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Unanticipated inflation |
Where economic agents do not accurately predict the future rate of inflation |
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Shoe-leather costs |
The time and money spent 'shopping around' by consumers to find the best deals when prices are rising throughout the economy |
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Fiscal drag |
Increases in the burden of taxation when tax allowances are not increased in line with inflation |
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Money illusion |
When economic agents fail to realise that changes in money values are not the same as changes in real values |
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Benign deflation |
Falling prices resulting from technological advances across the economy |
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Malevolent deflation |
Falling prices resulting from a significant downturn in economic activity |
