Glossary Terms:

What causes inflation?

Glossary terms from:
http://www.econedlink.org/e615


Causes of Inflation

Too much money chasing too few goods is common cause for inflation. Additionally, a rise in production costs can also lead to a rise in inflation. International lending and federal taxes can also be causes of inflation, while war is also a leading cause of inflation as well.

Check

A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.

Cost-Push Inflation

Inflation caused by rising costs of production.

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Demand-Pull Inflation

Inflation caused by increasing demand for output or "too much money chasing too few goods."

Goods

Tangible objects that satisfy economic wants.

Inflation

A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).

Labor

The quantity and quality of human effort available to produce goods and services.

Lender

One who lends; may be an individual or a business.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Savers

Persons who desire to conserve their monetary funds to the best of their ability.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Supply

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.