represents a persistent increase in average price levels.

Inflation  Disinflation  Deflation 

represents a persistent decrease in average price levels.

Inflation  Disinflation  Deflation 

occurs when the rate of inflation falls, this is not the same as   as prices are still rising but at a slower rate than before.

Inflation  Disinflation  Deflation 

      is the result of when rises in AD are greater than the countries ability to produce those goods and services.

  Cost  Demand  inflation  push  pull 

       is the result of a rise in production costs.

  Cost  Demand  inflation  push  pull 

The       (   ) measures changes in the price level of market basket of consumer goods and services purchased by households.

retail  consumer  price  index  CPI  producer 

The       (   ) - a price index that measures the average changes in prices received by domestic producers for their output.

retail  consumer  price  index  CPI  producer  PPI 

A weighted price index represents the weights attached to a     index which reflect the spending patterns of households in the nation.  The the proportion of disposable income used to consume a product, the higher the good or service is  .

retail  greater  price  index  weighted  core  lower 

/ underlying inflation represents the change in the    of goods and services, but does not include those from the   and     sectors. This measure of inflation excludes these items because their prices are much more volatile.

 energy  food  costs  index  weighted  Core Central  

     is very high and typically accelerating inflation, of generally several hundred %.  It quickly erodes the real value of the local currency, as the prices of all goods increases.

Hyper  inflation  Extreme 

Real income represents a person's income adjusted for the effects of   .

wages  income  inflation 

Good deflation is a fall in average prices caused by a fall in      , perhaps a reduction in oil or raw material prices, a rise in the value of the   or a rise in productivity.

costs  currency  labour  wages  production 

Bad deflation is a fall in       as a result of a fall in economic activity, when   falls at a faster rate than    .

AD  aggregate  AS  supply  demand 

  is a process by which deflation creates expectations of further price falls, and therefore consumers reduce their spending because they expect goods to become spending in the future. This fall in spending creates further   pressure in the economy.

spiral  Deflationary  Inflationary  deflationary  cost push 

The phillips curve is an economic concept developed by A. W. stating that inflation and   have a stable and relationship.

inverse  Phillips  prices  unemployment  wages