Definitions Flashcards
(5 cards)
1
Q
Inflation
A
A sustained increase in the general price level.
2
Q
Disinflation
A
When the general price level is rising but at a slower rate than previously.
3
Q
Deflation
A
A fall in the general price level.
4
Q
Cost-push inflation
A
- Inflation that occurs as a result of firms experiencing rising costs, as this means they will put up prices to protect their profit margins.
- Diagrammatically, inwards shift of SRAS > ^ price level.
5
Q
Demand pull inflation
A
- Diagrammatically, outwards shift in AD > ^ PL
