CC5

Question 1

CPI (Consumer Price Index)

Answer 1

A measure of the price level used across the EU and used by the Bank of England to measure inflation against its target (2%)

Question 2

CPIH

Answer 2

A measure of CPI inflation including owner occupied housing costs and council tax.
(Main measure of inflation in the UK)

Question 3

Retail Prices Index (RPI)

Answer 3

A measure of the Price Level which has been calculated in the UK for over 60 years and is used in a variety of contexts such as government to index welfare benefits and regulated train fares.
(excludes mortgage repayments)

Question 4

Inflation Rate

Answer 4

Calculated as the percentage change in the CPI. Calculated relative to a base year set equal to 100

Question 5

Inflation Rate

Answer 5

Calculated as the percentage change in the CPI. Calculated relative to a base year set equal to 100

Question 6

Living costs and food survey

Answer 6

5500 participants keep diary of spending on household goods. Creates a basket of 700 goods

Question 7

Cost-push inflation

Answer 7

Inflation caused by increases in the costs of production in the Economy

Question 8

Demand-pull inflation

Answer 8

Inflation which is caused by excess demand in the Economy

Question 9

Anticipated Inflation

Answer 9

Increases in prices which economic actors are able to predict with accuracy

Question 10

Unanticipated inflation

Answer 10

Increases in prices which economic actors like consumers and firms fail to predict accurately and so their decisions are based on poor information

Question 11

Hyper-inflation

Answer 11

large increases in the price level

Question 12

Indexation

Answer 12

Adjusting the value of economic variables such as wages or the rate of interest in line with inflation