Price Stability

Question 1

Price stability

Answer 1

When the general price level either stays the same or rises at a low rate over time

Question 2

Inflation

Answer 2

A sustained increase in the general price level

Question 3

Real

Answer 3

The value of an economic variable that takes inflation into account

Question 4

Nominal

Answer 4

The value of an economic variable based on the current prices (does not take into account inflation )

Question 5

Consumer price index

Answer 5

A measure of the general price level used to calculate the inflation rate

Question 6

causes of inflation

Answer 6

demand pull inflation(too much demand)
cost push inflation(rise in costs)

Question 7

consequences of inflation for consumers

Answer 7

loss of consumer confidence
fall in real income
income redistribution
consumers as debtors

Question 8

consequences of inflation for producers

Answer 8

increased production costs
lower exports
loss of business confidence

Question 9

consequences of inflation for savers

Answer 9

more people will end up buying less goods and services because their basket of goods has decreased forcing people to save