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INFLATION AND DEFLATION - Coggle Diagram
INFLATION AND DEFLATION
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THE COSTS OF INFLATION
Theinflation fallacy
Rise in prices means an equal loss in purchasing power.Many economists argue that every purchase is another person’s income, so this cannot be true. However, it is a useful rule of thumb for anyone who lives off a wage.
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Very high inflation
Inflation costs are easiest to identify when
inflation is very high—in the hundreds of percent or more.
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Moderate Inflation
Takes place when the prices of goods and services rise at a single digit rate annually. When an economy passes through moderate inflation, the prices of goods and services increase but at moderate rate.
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