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macro 1 - Coggle Diagram

- - - - the opposite of inflation/ a general fall in the prices in an economy
      - deflationary policies
        
        policies that are intended to reduce economic growth if the work as intended it will also reduce inflation
    - - a fall in the rate of inflation (there is still inflation but its getting smaller )
    - - a general rise in the prices of an economy
    - - a basket of goods most commonly brought by people in an economy
      - this isn't always accurate as it uses a proportion of the population to represent the rest and people will still be purchasing goods not in the basket
    - - when the level of inflation rises to an extremely high point (most economists consider this to be 50% or higher )
    - - reflation
        
        a rise in GDP after a period of recession
      - stagflation
        
        when there is rising or high inflation during a time of recession
    - - demand pull = when rising demand whilst the supply remains the same leading to it becoming more elastic and the price being raised
      - cost push = when increasing costs of production leads to prices being raised
  - - - controlled by policies set by monetary policy committee (MPC) in bank of england
      - changes how much is borrowed
      - one way that inflation is controlled
      - changed to increase or reduce consumption
    - - prices influenced by interest rates
      - more borrowed when lower interest rates
      - less borrowed when higher interest rates
      - when people are confident the economy will prosper or continue to prosper they will borrow more
      - can be manipulated by government to make people want to borrow more and consume more