Macroeconomics - Inflation
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Last updated 9:04 PM on 2/4/24
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5 Terms
1
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what is inflation?
increase in general price level of goods and services
2
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what are the causes of inflation?
demand-pull inflation
cost-push inflation
3
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what are the advantages of inflation?
Higher wages for workers
firms encouraged to increase output
can keep unemployment low in a recession
improvement of government finances
4
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what are the disadvantages of inflation?
lower purchasing power
lower export competitiveness
fall in value of savings
5
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what is deflation
decrease in general price level
