Economic Influences - Inflation 2.5.1
Inflation - A sustained increase in the general level of prices within an economy, there is a fall in the value of money. It is measured by recording price changes for a wide range of goods and services likely to be bought by average families. Consumer price index - A measure that examines the weighted average of prices of a basket of consumer good/ services. Disinflation - This is when a lower inflation rate causes prices to rise more slowly Deflation - A decline in the general price level in an economy, characterised by an inflation rate that is lower than 0% Hyperinflation - A period of very high inflation rates, usually leading to a loss of confidence in an economy's currency Inflation rate - The annual rate of change of the average price of goods and services Inflation can be a serious problem. it creates uncertainty and instability because it is hard to know whether it will accelerate or slow down. It is measured by the annual percentage change in consume...