economics

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  • Created by: 14turnerd
  • Created on: 13-11-18 16:59
Cost push inflation
Increase in the cost of production is forcing suppliers to increase the prices that they charge to consumers. For example: If workers more pay then they may have to raise the price of the product to compensate.
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Demand pull inflation
If there is a rise in general demand from consumers and businesses.For example: caused by high levels of confidence, this may lead to shortages in the short run. To ration demand, prices may rise causing inflation.
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Restriction in supply of products
Businesses may reduce their output of products (perhaps due to lack of available raw materials or due to government restrictions on demerit goods) which, in turn, forces suppliers to increase their prices.
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Monetary inflation
If there is too much money made available in an economy. E.g through greater availability of credit, then consumers will have access to more funds. This will lead to an increase in spending, forcing prices to rise.
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Consequences of Inflation and Price Stability
If inflation rises then poor people may become poorer as if inflation rises the general price of products rises therefore, they become poorer. However, if the inflation decreases then less wealthier people are able to afford and purchase more or bett
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Other cards in this set

Card 2

Front

Demand pull inflation

Back

If there is a rise in general demand from consumers and businesses.For example: caused by high levels of confidence, this may lead to shortages in the short run. To ration demand, prices may rise causing inflation.

Card 3

Front

Restriction in supply of products

Back

Preview of the front of card 3

Card 4

Front

Monetary inflation

Back

Preview of the front of card 4

Card 5

Front

Consequences of Inflation and Price Stability

Back

Preview of the front of card 5

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