Inflation

Question 1

what is inflation

Answer 1

it is the general rise in average prices across the economy

Question 2

why is having stable inflation important

Answer 2

if the rate is rising too fast, the economy cannot adapt quickly enough, this could cause many different problems, for example the value of real income could fall

Question 3

What is deflation

Answer 3

a persistent or continuing fall in the average price level

Question 4

what is disinflation

Answer 4

when the rate of inflation is falling but still positive