Inflation
What Inflation means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Inflation
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Reference: Pearson Edexcel
A sustained increase in the general price level of goods and services in an economy over a period of time, which leads to a fall in the purchasing power of money.
Erosion of purchasing power and uncertainty force firms to frequently update prices (menu costs) and negotiate wage increases.
Topics that use Inflation
- Inflation (Pearson Edexcel A-Level)
- The wider economic environment (Pearson Edexcel A-Level)
Related terms
- Business uncertainty
- Cost-push inflation
- Deflation
- Demand-pull inflation
- Disinflation
- Exchange rates
- Interest rates
- Investment
Using Inflation in the exam
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