Inflation and Deflation (Edexcel A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
What inflation means
What inflation means
General price level rises; money loses purchasing power
Consumer Price Index (CPI) purpose
Consumer Price Index (CPI) purpose
Measures UK inflation by tracking ~600 goods/services monthly
Shoe leather costs during inflation
Shoe leather costs during inflation
Time & resources spent researching market prices
Menu costs in inflationary environment
Menu costs in inflationary environment
Expenses of changing prices (reprinting, updating displays)
Hyperinflation definition
Hyperinflation definition
Inflation exceeding 100% per annum
What deflation means
What deflation means
General price level falls across the economy
Real value of money/debt
Real value of money/debt
Purchasing power - what money can actually buy
Index-linked interest rates
Index-linked interest rates
Interest rates tied directly to price index
High UK inflation effect on exports
High UK inflation effect on exports
UK products become more expensive in foreign markets
When deflation can be positive
When deflation can be positive
When caused by falling import or commodity prices