# data[].attributes.body
Inflation-Price of goods increasing
Inflation is measured by CPI (Consumer price index)

# data[].attributes.body
What is the business/economic cycle and GDP?

# data[].attributes.body
List the different ways in which low interest and high interest rates can affect the economy.

# data[].attributes.body
What is inflation and how is it measured?

# data[].attributes.body
What are the effects of Inflation?

# data[].attributes.body
Inflation is a rise in the price of goods. It is measured by the consumer price index which looks at the cost of a basket of goods overtime.

# data[].attributes.body
What are the effects of deflation?

# data[].attributes.body
1.  A business cycle is a cycle of fluctuations in the Gross Domestic Product GDP Formula The GDP Formula consists of consumption, government spending, investments, and net exports. We break down the GDP formula into steps in this guide.

# data[].attributes.body
The business cycle is the movement of GDP whether it is expansion or contraction.

# data[].attributes.body
inflation is a rise in the price of goods, that a business offers. it is measured by CPI- consumer price index

# data[].attributes.body
Deflation makes goods less expensive=customers may be put off buying expensive goods because they believe they will be cheaper in the future=reduced demand=harder for businesses to survive

# data[].attributes.body
- customer saving and spending
- cash flow
- increases the cost of borrowing
- business planning

# data[].attributes.body
1.  A business cycle is a cycle of fluctuations in the Gross Domestic Product GDP Formula The GDP Formula consists of consumption, government spending, investments, and net exports. We break down the GDP formula into steps in this guide.

# data[].attributes.body
1. Increases the cost of borrowing. With higher interest rates, interest payments on credit cards and loans are more expensive. Therefore this discourages people from borrowing and spending. People who already have loans will have less disposable income because they spend more on interest payments. Therefore other areas of consumption will fall.

2. Increase in mortgage interest payments. Related to the first point is the fact that interest payments on variable mortgages will increase. This will have a significant impact on consumer spending. This is because a 0. 5% increase in interest rates can increase the cost of a £100,000 mortgage by £60 per month. This is a significant impact on personal discretionary income.

3. Increased incentive to save rather than spend. Higher interest rates make it more attractive to save in a deposit account because of the interest gained.

# data[].attributes.body
a cycle or series of cycles of economic expansion and contraction.

# data[].attributes.body
Increase of interest rates:

Increases the cost of borrowing

Increase in mortgage interest payments.

Increased incentive to save rather than spend.

Increased incentive to save rather than spend.

# data[].attributes.body
- Government Spending
- Investment in Business
- House Prices
- Construction
- Inflation of Goods and Wages

# data[].attributes.body
Inflation-Price of goods increasing
Inflation is measured by CPI (Consumer price index)

# data[].attributes.body
When consumers pay less in interest, this gives them more money to spend, which can create a ripple effect of increased spending throughout the economy. Businesses and farmers also benefit from lower interest rates, as it encourages them to make large equipment purchases due to the low cost of borrowing.

# data[].attributes.body
Inflation is when the cost of goods and services goes up.
Measuring inflation is a difficult problem for government statisticians. To do this, a number of goods that are representative of the economy are put together into what is referred to as a "market basket." The cost of this basket is then compared over time.

# data[].attributes.body
Economic cycle: Variations in the annual rate of growth of an economy over time

# data[].attributes.body
High interest rates:
- Increased cost of borrowing
- Increased return if saving
- Reduced investment
- Lower economic growth

Lower interest rates:
- Lower borrowing cost
- Increased investment
- Economic growth

# data[].attributes.body
The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles are generally measured using rise and fall in real – inflation-adjusted – gross domestic product (GDP), which includes output from the household and nonprofit sector and the government sector, as well as business output.

# data[].attributes.body
inflation us measurements of the prices in the UK economy and it is measured by the CPI (consumer price index)

# data[].attributes.body
The business cycle is a measure of the current state of the UK's economy and how businesses are performing. It is measured using GDP, which stands for gross domestic product. This is a total of all of the goods and services sold in the UK.

# data[].attributes.body
Increase of inflation-Price of goods increasing

Consumers can afford less=lower consumer demand

Businesses can afford less as costs increase = cut costs ( redundancies increase in unemployment further fall in demand for goods)

Inflation makes goods more expensive- employees demand pay increases to cover costs

If pay increases are not equal to inflations=in terms employees are paid less

If pay increases are equal or higher that inflations=higher costs higher prices to cover costs

# data[].attributes.body
Many governments have set their central banks a target for a low but positive rate of inflation. They believe that persistently high inflation can have damaging economic and social consequences.

1. Income redistribution: One risk of higher inflation is that it has a regressive effect on lower-income families and older people in society. This happen when prices for food and domestic utilities such as water and heating rises at a rapid rate

2. Falling real incomes: With millions of people facing a cut in their wages or at best a pay freeze, rising inflation leads to a fall in real incomes.

# data[].attributes.body
The Business Cycle is a cycle or series of cycles of the economic expansion and contraction.

GDP is the total value of goods produced and services provided in a country during one year.

# data[].attributes.body
Increases the cost of borrowing

Increase in mortgage interest payments.

Increased incentive to save rather than spend.

Increased incentive to save rather than spend.

Rising interest rates affect both consumers and firms.

Government debt interest payments increase.

Reduced confidence.

# data[].attributes.body
The effects of inflation are  1. Erodes Purchasing Power 6. Reduces Unemployment 2. Encourages Spending and Investing 7. Increases Growth 3. Causes More Inflation 8. Reduces Employment and Growth 4. Raises the Cost of Borrowing 9. Weakens (or Strengthens) the Currency 5. Lowers the Cost of Borrowing.

# data[].attributes.body
Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.
Inflation is measured by Consumer Price Index (CPI) - A measure of price changes in consumer goods and services such as gasoline, food, clothing and automobiles. The CPI measures price change from the perspective of the purchaser.

# data[].attributes.body
The minimum wage will rise eventually, prices will also increase.

Consumers will not be able to afford as many things.

Many people face a cut in their wages or at best a pay freeze, rising inflation leads to a fall in real incomes.

# data[].attributes.body
https://www.youtube.com/watch?v=nyhKZSXt2FM

# data[].attributes.body
The business cycle is a cycle of expansions and contractions, GDP is an index by which this is measured

# data[].attributes.body
Deflation is associated with an increase in interest rates, which will cause an increase in the real value of debt. As a result, consumers are likely to defer their spending.