Inflation and Deflation: The Fundamentals (AQA A-Level Economics): Flashcards
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Inflation
Inflation
Persistent rise in general price level over time
Deflation
Deflation
Sustained decrease in overall price level
Disinflation
Disinflation
When inflation rate falls but remains positive
Demand-pull inflation cause
Demand-pull inflation cause
Excessive aggregate demand beyond supply capacity
Cost-push inflation cause
Cost-push inflation cause
Rising production costs from wages, energy, raw materials
Stagflation
Stagflation
High inflation with stagnant/falling economic growth
Bank of England independence year
Bank of England independence year
1997
The Great Moderation period
The Great Moderation period
1993-2007, stable UK inflation near 2% target
Quantity theory of money equation
Quantity theory of money equation
(Money × Velocity = Price × Quantity)
Monetarist view of inflation
Monetarist view of inflation
Always and everywhere a monetary phenomenon (Friedman)