Economics A-Level
Inflation
What Inflation means in Economics A-Level, as defined for AQA.
Definitions of Inflation
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Reference: AQA
A rise in the general price level, which the monetarist model asserts is always and everywhere a monetary phenomenon driven by excessive money creation.
A rise in prices that nominal income is adjusted for to give real income, and which can exceed nominal income growth so that real income falls.
Demand-pull inflation arises when rising aggregate demand meets an economy near full capacity, where long-run aggregate supply is inelastic.
A sustained increase in the general price level of goods and services in an economy over time, meaning the purchasing power of money falls.
An objective that a depreciation may conflict with by causing demand-pull and cost-push inflation due to costlier imported raw materials.
A sustained increase in the general price level, driven by demand-pull and cost-push influences.
Topics that use Inflation
- Aggregate demand and the level of economic activity (AQA A-Level)
- Central banks and monetary policy (AQA A-Level)
- Inflation and deflation (AQA A-Level)
- The circular flow of income (AQA A-Level)
Related terms
- Aggregate demand
- Circular flow of income
- Purchasing power
- Circular flow
- Cost-push inflation
- Credit creation
- Debt and wealth effects
- Deflation
Using Inflation in the exam
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