Policies To takle inflation AS/A2 Economics

A quick revision mindmap on the four macroeconomic policies to tackle inflation. USEFUL for scoring high marks in the 25 mark essays if described in more detail.

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  • Policies to Tackle Inflation
    • Fiscal Policy
      • Increase Taxes/ Decrease Govt Spending
      • Less disposable income
      • Consumer Spending falls
      • Ceteris Paribus- AD (Price Level) Falls
      • G falls and C falls. (AD=C+I+G+(X-M)
    • Interest Rates
      • Definition= Cost of Borrow/ Reward for Saving
      • Increase Interest Rates
        • Savings increase
        • Consumer Spending Decreases
        • Investment Decreases
        • Fall in AD
        • Negative Multiplier Effect
        • Price Level Falls
        • Diagram
    • Supply Side Policies
      • For Demand Pull OR Cost Push
      • Causes Of Increased Prices
        • Increase Unit cost of Labour
          • Imports
          • Commodities
          • VAT
          • Profit Margin
      • Decrease Corp Tax
      • Increase Subsidies
      • Decrease Welfare Benefits
      • Increase Education and Training
      • Increase Technology
      • Privatisation/ Deregulation
    • Exchange Rate
      • Interest Rate and Exchange Rate are positively Related
      • Interest Rate Increases= Exchange Rate Increases
      • Price of Exports Increase
      • Exports decrease
      • Price of Imports fall
      • Imports Increase
      • AD falls
      • Price Level Falls


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