101 Concepts for the Level I Exam
Concept 27: Inflation, Hyperinflation, Disinflation & Deflation
- Inflation is the persistent increase in general price levels over time. The inflation rate refers to the percentage increase in price level over a period.
- Disinflation refers to the decrease in the inflation rate over time i.e. price levels are increasing at a lower rate (e.g. from 6% to 4%).
- Deflation is the persistent decrease in general price levels over time.
- Hyperinflation refers to out of control acceleration of inflation which can destroy a country’s monetary system and bring about social and political upheavals.