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Economics IGCSEPDF 103
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Key Terms
Key Terms
Key Terms
Causes of Inflation
Policies for Stability
Definition & Explanation
Definition & Explanation
Policies to Control Inflation
Causes of Deficits / Surpluses
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Inflationrate, Deflation, CPI, Demand-pull, Cost-push.
Demand-pullinflation – excess demand in the economy.
Cost-push inflation – rising production costs increase prices.
Currentaccount, Trade balance, Deficit, Surplus, Devaluation.
Highimportspendingorlow exports may cause a deficit.
Export growth, devaluation, and competitiveness may create a surplus.
Monetarypolicy–raisinginterest rates to reduce borrowing and demand.
Fiscal policy – reducing public spending or increasing taxes.
Supply-side policies – improving efficiency to reduce production costs.
Labourforce, Unemployment rate, Frictional, Structural, Cyclical, Seasonal.
Exchange rateadjustment, promoting exports, reducing non-essential imports.
Fiscal and monetary policy to influence demand.
Inflation is a sustained increase in the general price level of goods and services.
Deflation is a persistent fall in the general price level.
The Balance of Payments(BoP) records all economic transactions between residents of a
country and the rest of the world.
The current account includes trade in goods, services, income, and transfers.
5.3 Inflation & Deflation
5.4 Balance of Payments