Inflation. Standard 5 Notes Part I. Inflation- a sustained rise in the level of prices generally or a sustained decrease in purchasing power. Inflation. Demand-pull inflation- results when total demand rises faster than the production of goods and services
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Standard 5 Notes Part I
Inflation- a sustained rise in the level of prices generally or a sustained decrease in purchasing power.Inflation
Demand-pull inflation- results when total demand rises faster than the production of goods and services
"more money chasing the same amount of goods.“
What causes inflation?
Cost-push inflation- results when increases in the costs of production push up prices.
Decreasing Value of the Dollar- people on fixed incomes are hit hard. They do not receive wage increases. EX: People on social security
+ Investment (I)
+ Government Spending (G)
+ Net Exports (Foreign trade, X)