Flashcards on Inflation and Deflation

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What is inflation?

Inflation is the sustained increase in the general price level of goods and services in an economy over a period of time.

What is deflation?

Deflation is the sustained decrease in the general price level of goods and services in an economy over a period of time.

What are the causes of inflation?

Causes of inflation include excessive money supply, increased production costs, and demand-pull inflation.

What are the effects of inflation on consumers?

Inflation erodes the purchasing power of money, leading to a decrease in the real value of savings and fixed incomes.

What are the effects of inflation on businesses?

Inflation can impact businesses by increasing production costs and reducing consumer spending power.

What are the effects of deflation on the economy?

Deflation can lead to reduced investment, decreased consumer spending, and increased unemployment.

What is demand-pull inflation?

Demand-pull inflation occurs when there is an increase in aggregate demand that outpaces the economy's ability to supply goods and services.

What is cost-push inflation?

Cost-push inflation occurs when there is an increase in production costs, such as wages or raw materials, that leads to higher prices.

What is hyperinflation?

Hyperinflation is an extremely high and typically accelerating inflation. It often occurs during times of political or economic instability.

What are the measures to control inflation?

Measures to control inflation include monetary policy, fiscal policy, and supply-side policies.

What is disinflation?

Disinflation is a decrease in the rate of inflation, meaning prices are still rising but at a slower pace.

What are the causes of deflation?

Causes of deflation can include a decrease in aggregate demand, technological advancements, and central bank policies.

What is the impact of deflation on debt?

Deflation increases the real value of debt, making it more difficult for borrowers to repay loans.

What is stagflation?

Stagflation is a combination of stagnant economic growth, high unemployment, and high inflation.

What is the difference between inflation and deflation?

Inflation is an increase in the general price level, while deflation is a decrease in the general price level.

What is inflation?

Inflation is the sustained increase in the general price level of goods and services in an economy over a period of time.

What is deflation?

Deflation is the sustained decrease in the general price level of goods and services in an economy over a period of time.

What are the causes of inflation?

Causes of inflation include excessive money supply, increased production costs, and demand-pull inflation.

What are the effects of inflation on consumers?

Inflation erodes the purchasing power of money, leading to a decrease in the real value of savings and fixed incomes.

What are the effects of inflation on businesses?

Inflation can impact businesses by increasing production costs and reducing consumer spending power.

What are the effects of deflation on the economy?

Deflation can lead to reduced investment, decreased consumer spending, and increased unemployment.

What is demand-pull inflation?

Demand-pull inflation occurs when there is an increase in aggregate demand that outpaces the economy's ability to supply goods and services.

What is cost-push inflation?

Cost-push inflation occurs when there is an increase in production costs, such as wages or raw materials, that leads to higher prices.

What is hyperinflation?

Hyperinflation is an extremely high and typically accelerating inflation. It often occurs during times of political or economic instability.

What are the measures to control inflation?

Measures to control inflation include monetary policy, fiscal policy, and supply-side policies.

What is disinflation?

Disinflation is a decrease in the rate of inflation, meaning prices are still rising but at a slower pace.

What are the causes of deflation?

Causes of deflation can include a decrease in aggregate demand, technological advancements, and central bank policies.

What is the impact of deflation on debt?

Deflation increases the real value of debt, making it more difficult for borrowers to repay loans.

What is stagflation?

Stagflation is a combination of stagnant economic growth, high unemployment, and high inflation.

What is the difference between inflation and deflation?

Inflation is an increase in the general price level, while deflation is a decrease in the general price level.

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