Inflation Flashcards
(11 cards)
What is inflation?
Increase in the average prices in the economy.
What is disinflation?
When the level of inflation is rising, but at a slow rate.
What is deflation?
When levels of inflation is falling, prices are falling.
What is the Uk’s target inflation rate?
2%
What is the role of the Bank of England?
To control levels of inflation.
What are the three things MPC stand for?
Monetary policy committee, Marginal private cost and marginal propensity to consume.
Give an example of a country with a high inflation rate
Argentina-95%
What is the monetary policy Commitee?
A group of 9 individuals who are responsible for making decisions on bank rates.
What does RPI stand for and what does it measure?
Retail Price Index.
It measures a basket of goods with the most commonly purchased items.
What is CPI and what does it measure?
CPI is consumer price index and it measures where consumers spend their disposable income
