Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 11 Inflation - Coggle Diagram
Chapter 11 Inflation
Deflation
Definition
Causes
Effects
Policies to address
Definition and measurement
Headline vs Core
Mild vs Hyper
Types
Demand-pull
Causes
Changes in CIG(X-M)
Impact of rising AD
Cost-push
Sources
Rising cost of production
Wage-push inflation leads to rising COP
Imported inflation
Rising commodity prices
Depreciation of domestic currency
Impact of rising cost of production
Effects
Internal
On households
Material SOL
Savings
On firms
Production and profits
Mild Demand-pull
Cost-push
High rates of inflation
On the government
Demand-pull
Cost-push
On the economy
Mild Demand-pull
High inflation on AD
Investments
Export revenue
Consumption expenditure on domestic products
External (not in chapter)
Remedies
For demand-pull
FP
Limitations
Size of multiplier
Rigidity/inflexibility of government spending
Time lag
Political consideration or acceptability
MP
Limitations
Interest elasticity of investments and consumption
Size of multiplier
Exchange rate appreciation
Limitations
PED of imports
Availability of foreign exchange
Size of multiplier
IPP
Limitations
Increased borrowing
Decrease in standard of living
Poor response to wage guidelines
Size of multiplier
For cost-push
Short-run
FP
Exchange rate appreciation
IPP
Long-run