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Inflation - Coggle Diagram
Inflation
High inflation : costs
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savers lose out as interest rate doesn't match inflation (shoe leather costs) - erodes the value of savings
Fiscal drag: getting a pay rise to match inflation but that then puts you in a higher income tax band so you're not better off and have to pay more - tax bands not tailored to inflation
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Anticipated inflation : workers ask for higher wages, producer costs rise so price of good increase too
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Measured by CPI and RPI
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RPI :retail price index
same as CPI but takes into account mortgages payments, rents and council tax
living cost and food surveys are carried out to create a basket of goods consisting of the most used products (710 products)
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