2.6 Inflation

By the end of this unit you should be able to:

Explain the concepts of inflation, disinflation, and deflation.
Explain how it is measured.
Explain that inflation figures may not accurately reflect changes in consumption patterns and the quality of the products purchased.
Explain that economists measure a core/underlying rate of inflation to eliminate the effect of sudden swings in the prices of food and oil, for example.
Explain that a producer price index measuring changes in the prices of factors of production may be useful in predicting future inflation.

Crash Course: Inflation