Inflation
An analysis of the causes and effects of demand pull and cost push inflation
- Created by: George
- Created on: 22-09-13 18:31
Inflation |
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Causes
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Effects
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Overall summaryInflation therefore undercuts the governments key economic objectives which therefore causes the government to lack control. However, governments aim to maintain a rate of inflation of 1-3% in order to avoid deflation which can be more damaging due to the industrial collapse as people abstain from products in the hope their price will fall causing less consumer demand hence creating industries to fail. This is why governments aim for a slight rate of inflation to ensure a degree of safety when managing the economy. |
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