What is inflation
what inflation rate does the government target?
2.0%
how many objects included in a basket of goods and how is it measured?
650 different items in the basket. 141 different areas. 80,000 from online shops whilst 100,000 different shops around the country. prices are checked monthly but the inflation measure is as a measure across a twelve month period. for example march's inflation rate will be the change from last march to this month.
what about cpi?
CPI does not include housing costs or mortgage.
How is inflation measured (RPI)
Price of basket of Goods but it includes housing costs and mortgage
what is disinflation?
a fall in the rate of inflation... there is inflation but at a slower rate then previous months.
what is cost push inflation?
costs of production rises and pushes up prices.can also be tax rates rising.
what is inflation?
prices rise overtime or purchase power of £ has fallen. a sustained general rise in the price of goods and services over time.
What is demand pull inflation?
too much money chasing too few good. excess demand causes prices to rise. cause by anything which puts money in peoples pockets for example tax cuts, cuts in base rates of interest real wage increases. tends to be a short term issue as eventually production will expand and reduce demand pull inflation.
