Economic essays on inflation
28 November 2016 by Tejvan Pettinger


UK inflation since 1989.
Definition – Inflation – Inflation is a sustained rise in the cost of living
and average price level.
Causes Inflation – Inflation is caused by excess demand in the
economy, a rise in costs of production, rapid growth in the money
supply.


Costs of Inflation – Inflation causes decline in value of savings,
uncertainty, confusion and can lead to lower investment.
Measuring Inflation – Inflation is measured by CPI and RPI. It is
calculated by finding a typical basket of goods. Giving a weighting to
goods and measuring price changes every year.