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Unit 2: Managing the Economy-Definitions

Inflation: - Inflation is a rise in the general price level in the economy. It is measured by the
Consumer Price Index. It's a measure of an increase in the cost of living.
Demand-pull Inflation: - This is where demand in an economy increases but…

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Export led growth: -This is where the main cause of an increase in aggregate demand is by
an increase in exports.
Wealth effects: - Wealth effects occur when asset prices rise and create a feeling of being
richer. This leads to an increase in consumption.
Fiscal Policy: - Fiscal policy…


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