Inflation and Unemployment Overview
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4. INFLATION a. Define Inflation (page 16)
Prices rising. Money buys less. High inflation = cost of living up. Too much inflation
= unstable economy. Too little inflation = weak demand, risk of recession. b.
11 items used to calculate inflation (Page 17) • Food and non alcoholic beverages
• Alcohol and tobacco • Clothing and footwear • Housing (rent, utilities, maintenance)
• Furnishings, household equipment and services • Health • Transport
• Communication • Recreation and culture • Education • Insurance and
financial services c. Causes of Inflation (Demand) (PAGE 18) Too much money.
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