Basic overview of inflation- economics

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  • Created by: Lottie
  • Created on: 05-03-12 11:56
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The Inflation Calculator
uses a UK price index to show you how the cost of goods and services has changed over time.
calculate the future cost of goods and services based on price changes from a date in the past.
calculate the past cost of goods and services based on price changes from a date in the future.
works for values of goods and services between £1 and £1,000,000,000,000 (£1 trillion).
Deflation
If prices fell
average inflation will be negative
Q.E
Injects money directly into economy
Response to sharp fall in demand
Aim increase spending
Prints out more money
Buys assets= increases price so reduces yield return decrease switch into other assets prices rise
pushes down on yield
Lower yields reduce the cost of borrowing = more spending

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