Economic growth and inflation

GDP

(gross domestic product) the total monetary value of all finished goods and services produced within a country's borders during a specific period

GDP per capita

The average wealth or economic output per person

Cost of living

The price of necessities; food, water, transport, homing, and energy

Inflation

The rising average price of goods and services

Price stability

The general price for goods and services says mostly the same

Rate of inflation

The percentage increase in the average price of goods and services

Consumer price index

The average change in the rate of inflation

demand pull inflation

When prices go up because too many people want to buy too few things

Cost push inflation

Businesses are forced to raise prices after higher production costs

Deflation

A general fall in prices over time

Disinflation

When prices are still rising, but at a slower rate than before

Hyperinflation

Extremely fast and out-of-control inflation where prices rise very quickly

Causes of demand pull inflation

• A growing economy

• Increased government spending

• Shortage of popular products

• Firms investing in capital

• When the economy is close to full employment

Causes of cost push inflation

• increased raw material costs

• Increased production costs

• Higher wages

• Interest on loans

• Increased business rates