Please enable JavaScript.
Coggle requires JavaScript to display documents.
Inflation - Coggle Diagram
Inflation
Effects
Effect on business
Cut back on investment
Less exports
Increased cost of suppliers
Consequences of inflation: UK goods prices rising => More expensive for foreign market => Lower export
Effects on
Firms: Higher costs => lower confidence in spending and investing
Workers: Less disposable income => spend more
Consumers: Weaken power of money value
Extension: High prices => Less export =>Weakened economy output
The difference
Inflation: sustained increase
Deflation: Decrease in the general level of prices
Disinflation: Inflation but slower
Causes
Cost push factors: take place when the price for raw materials increase
Demand pull factors: Take place when the demand rise (consequence of price and demand law)
Definition: Sustained increase in the general level of prices
Measurement: Consumer price index
Aggregate demand: The total demand for goods and services within a nation