econs

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  • Created by: ZXO
  • Created on: 18-04-15 06:08
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  • ECONOMICS: Economics Indicators
    • RPI/CPI
      • Measures average change in prices over a year
      • Calculation
        • Based on base year (100)
        • Weights given based on proportion of income spent
        • Weights x Price Index
        • Basket of goods
        • All added together
        • Divided by weights
      • Disadvantages
        • Effect for specific groups not shown
        • Compared to base year
        • Some items vary a lot
    • Inflation
      • Sustained rise in general price level over period of time
      • Causes
        • Cost-push
        • Demand-pull
      • Effects
        • Unpredictable economy
        • Mild inflation can be good
        • Value of money decreases
        • Low income
          • Harder to buy necessities
          • Drop in living standard
        • Fixed income
          • Fall in real income
          • Save less
          • Spend more
        • High income
          • Higher proportion spent on necessities
          • Save less
          • Spend more
        • Savers
          • Savings lose value
        • Businesses
          • Supplying goods on credit decreased
          • Can't predict future
        • Borrowers
          • Value of debt decreased
          • Benefits
    • Deflation
      • General fall in price levels over period of time
      • Causes
        • Fall in demand
        • Increase of supply
        • Decrease in money supply
      • Effects

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