Economics Unit 4 - Inflation and Deflation 5.0 / 5 based on 1 rating ? EconomicsInflation and deflationA2/A-levelAQA Created by: anna_richardsCreated on: 23-02-16 20:18 What is inflation? A sustained increase in the general price level 1 of 9 What is deflation? A fall in the general price level 2 of 9 What are the 2 causes of inflation? Cost-push and Demand-pull 3 of 9 What are 4 consequences of inflation? Higher cost of living, Reduced competition, Increased interest rates, Discourages investment 4 of 9 What are the 2 methods the measure inflation? CPI and RPI 5 of 9 Does the CPI include house prices? No, RPI does 6 of 9 What are the limitations of measuring inflation? Over estimates inflation, Doesn't consider the whole economy 7 of 9 What is Fisher's equation? MV = PT 8 of 9 What 2 components of Fisher's equation are constant? V and T 9 of 9
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