Inflation (Grade 12 NSC Matric Economics): Flashcards
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Inflation
Inflation
Sustained increase in price level, reduces buying power of money
Demand-pull inflation
Demand-pull inflation
Aggregate demand exceeds aggregate supply
Cost-push inflation
Cost-push inflation
Price increase caused by rising production costs
Hyperinflation threshold
Hyperinflation threshold
Inflation exceeds 50%
Consumer Price Index (CPI)
Consumer Price Index (CPI)
Index measuring fixed basket of consumer goods & services
Producer Price Index (PPI)
Producer Price Index (PPI)
Assesses impact of changes in production input weighting
Core inflation
Core inflation
CPI excluding volatile items, shows underlying trends
SA inflation target range
SA inflation target range
Between 3% and 6%
MPC main purpose
MPC main purpose
Determine interest rates to meet inflation target
Stagflation
Stagflation
Low growth, high unemployment & high inflation together