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6 Cards in this Set
- Front
- Back
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What’s inflation |
this is a persistent increase in the general price level over a given period of time |
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Why do we calculate inflation |
This is to measure the cost of living in a country. For example, a higher inflation increases the cost of living and life becomes more expensive |
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Name two methods to calculate inflation |
1) RPI 2) CPI |
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List steps of measuring inflation |
1) selection of the base year 2)sampling of basket goods which may be representative of all goods in the economy 3) finding out how households spends their money. The weighing on their expenditure across different goods 4) record how price changes . This is the % chance in price of goods in the basket 5) working out the weigheted price index. Which is W x change in price 6). Calculate the general change in price |
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Name causes and types of inflation |
a) demand pull inflation b) cost push inflation c) monetary inflation |
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What’s demand pull inflation |
This is a type of inflation caused by an increase in the AD more than AS |
