Inflation (Junior Cert Business Studies): Flashcards

Sustained increase in average price level of goods/services

Amount of goods/services money can buy

Measures changes in cost of typical basket of goods/services

Central Statistics Office (CSO)

((New cost - Original cost) / Original cost) × 100

When inflation rate falls below 0% (prices fall)

When consumer demand exceeds supply

When production costs increase, forcing prices up

Reduces it - people can buy fewer goods with same income

Fixed income earners (pensions, fixed wages)

Reduces it - Irish firms struggle vs foreign competitors

Irish products become more expensive in foreign markets

Around 2%