443903
Description
Mind Map by eleanor.adamandi, updated more than 1 year ago
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Inflation
- The steady and persistent rise in the general level of prices, resulting in a reduction
in the purchasing power of money
- Measured using the
Consumer Price Index
- Limitations
- Based on average pattern of spending
- Weights used apply in base year only
- Changes in quality of goods not measured
- New products on market not included
- Switch to new brands not measured
- Based on average pattern of spending
- Uses of Consumer Price Index
- Measure inflation
- Wage negotiations
- Widen tax bands
- Indexation of Investments
- Measure of International Competitiveness
- Measure inflation
- Limitations
- Causes of Inflation
- Demand- Pull Inflation
- Cost-Push Inflation
- Government Induced Inflation
- Demand- Pull Inflation
- Economic Effects of Inflation
- Production/Consumption Encouraged
- People on Fixed Incomes Lose Out
- Speculation Encouraged
- Loss of International Competitiveness
- Benefits to Government
- Production/Consumption Encouraged
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