Causes of Inflation
- Created by: Imogenbn99
- Created on: 22-11-15 12:17
View mindmap
- Causes of Inflation and Government Policy
- Inflation level= The Rate of Change of prices
- Inflation = An increase in GENERAL price level
- Deflation = A decrease in GENERAL price level (below base)
- Disinflation = Inflation at a slower rate
- Demand - Pull Inflation
- More money in the economy so people spend more so demand increases
- Monetary Inflation
- Near full employment
- Businesses compete for resources
- People have disposable income
- TIGHT fiscal and monetary policy
- More money in the economy so people spend more so demand increases
- Cost - Push inflation
- Costs rise due to :
- Food costs
- Raw materials
- Wage costs
- Land costs
- Exchange rate costs
- Governement cannot do much to help
- Costs rise due to :
Comments
No comments have yet been made