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Inflation and Unemployment Overview

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Created November 10, 2025

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4. INFLATION a. Define Inflation (page 16)

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Prices rising. Money buys less. High inflation = cost of living up. Too much inflation

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= unstable economy. Too little inflation = weak demand, risk of recession. b.

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11 items used to calculate inflation (Page 17) • Food and non alcoholic beverages

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• Alcohol and tobacco • Clothing and footwear • Housing (rent, utilities, maintenance)

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• Furnishings, household equipment and services • Health • Transport

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• Communication • Recreation and culture • Education • Insurance and

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financial services c. Causes of Inflation (Demand) (PAGE 18) Too much money.

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