INFLATION
CAUSES & CONSEQUENCES
MACROECONOMIC OBJECTIVES
- Low & controlled levels of inflation
- Low levels of unemployment
- Economic Growth
- A balanced Balance of Payments
Inflation is a persistent or sustained rise in the general level of prices over a period of time.
CAUSES
COST-PUSH FACTORS
Refers to the costs a business has to meet, such as wages and raw materials. This costs will often pass to the consumer in the price of the product.
FACTORS OF PRODUCTION : land, labour, capital &enterprise.
DEMAND- PULL INFLATION
Occurs when rising demand pushes up to price of goods. This happens when people have more to spend.
ISSUE OF MONEY
Printing money, more money circulating.