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Inflation

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This mindmap outlines the concept of inflation. It's an ideal revision tool for those studying A-Level or equivalent economics
eleanor.adamandi
Mind Map by eleanor.adamandi, updated more than 1 year ago More Less
jackexamtime
Created by jackexamtime over 11 years ago
eleanor.adamandi
Copied by eleanor.adamandi over 11 years ago
eleanor.adamandi
Copied by eleanor.adamandi over 11 years ago
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Resource summary

Inflation
  1. The steady and persistent rise in the general level of prices, resulting in a reduction in the purchasing power of money
    1. Measured using the Consumer Price Index
      1. Limitations
        1. Based on average pattern of spending
          1. Weights used apply in base year only
            1. Changes in quality of goods not measured
              1. New products on market not included
                1. Switch to new brands not measured
                2. Uses of Consumer Price Index
                  1. Measure inflation
                    1. Wage negotiations
                      1. Widen tax bands
                        1. Indexation of Investments
                          1. Measure of International Competitiveness
                        2. Causes of Inflation
                          1. Demand- Pull Inflation
                            1. Cost-Push Inflation
                              1. Government Induced Inflation
                              2. Economic Effects of Inflation
                                1. Production/Consumption Encouraged
                                  1. People on Fixed Incomes Lose Out
                                    1. Speculation Encouraged
                                      1. Loss of International Competitiveness
                                        1. Benefits to Government
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