Inflation
Definition. Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time, which reduces the purchasing power of money. It is commonly measured by the percentage change in a price index such as the consumer price index.
Inflation may be demand pull, caused by excess aggregate demand, or cost push, caused by rising costs of production such as higher wages or imported input prices.
This term belongs to Measuring Inflation and the CPI in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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