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| percentage change from one year to another |
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utoo much money in the economy leads to inflation. |
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| occurs when producers raise prices in order to meet increased costs |
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uthe process by which rising wages cause higher prices, and higher prices cause higher wages. |
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| states that inflation occurs when demand for goods and services exceeds existing supplies |
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ufirms will find it difficult to recruit workers, and competition among firms will lead to increases in wages. |
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| What matters to people is the real value or purchasing power of money or income, not its face value. |
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uis a measure of the value of money over time. measures changes in a fixed “basket of goods” which contains items purchased by the typical consumer |
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