OCR Economics Inflation Revision Notes
Master OCR Economics Inflation using simple revision notes, key facts and practice questions — all generated by AI for your exam.
Inflation refers to the general increase in prices and the fall in the purchasing value of money. It is a key economic indicator that affects consumers, businesses, and policymakers alike.
Key Concepts
- 1Inflation is measured by the Consumer Price Index (CPI) and the Retail Price Index (RPI).
- 2Demand-pull inflation occurs when demand exceeds supply.
- 3Cost-push inflation arises when production costs increase, leading to higher prices.
- 4Hyperinflation is an extreme form of inflation, often exceeding 50% per month.
- 5Central banks, like the Bank of England, use monetary policy to control inflation.
Simple Explanation
Inflation means that prices for goods and services are rising, which means your money buys less than it used to. It can happen when people want to buy more than what is available, or when it costs more to make things. Understanding inflation helps you see how it affects your savings and spending.
Memory Trick
“Remember 'DICE' for inflation: Demand-pull, Increase in costs, Central banks, and Effects on purchasing power.”
Flashcards
What is inflation?
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Exam Questions
Describe and explain the causes of inflation. [6 marks]
6 marksView mark scheme hint▾
Discuss demand-pull and cost-push factors, including examples.
Explain how inflation can affect consumers. [4 marks]
4 marksView mark scheme hint▾
Consider purchasing power and savings.
What is meant by 'cost-push inflation'? [2 marks]
2 marksView mark scheme hint▾
Define and provide an example.
Practice Quiz
What is the primary measure of inflation in the UK?
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