Tuesday, December 16, 2008

Is there a danger of deflation?

Shop windowThis BBC article describes the UK economies worries about deflation. Read it and answer the following questions.

1) What is CPI. What is RPI? What is the difference between CPI and RPI?

2) What causes inflation?

3) What is deflation and what causes it?

4) What policies can you suggest that will impact on deflation and inflation? Hint - this article and this one may help!

5) Why is deflation a problem

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