Inflation Flashcards
1
Q
Target for inflation
A
2%
2
Q
Deflation
A
Fall in the general price level
3
Q
Disinflation
A
Slowdown in the rate of increase of prices
4
Q
Purchasing power
A
Buying power of a unit of currency, inversely related to rate of inflation
5
Q
Stagflation
A
Slow growth and rising inflation, 1970s inflation rose to nearly 30% because oil prices
6
Q
Two causes of inflation
A
Cost push and demand pull
7
Q
Positives from inflation
A
Workers with strong wage bargaining power, real value of debt may fall, sustained period of asset price inflation can benefit wealthy
8
Q
A
