Cost of Inflation

1) Income inequity
2) Less exports, more imports
3) Shoe Leather Costs
4) Menu Costs
5) Decreased Investment
6) Business Cycles

Macro Consequences of Inflation
  1. Uncertainty
  2. Speculation
  3. Non-Productive Investments

Deflation - Countinuous decrease in the average level of prices of goods and services (negative inflation rate) overtime.

Disinflation - Falling inflation rate. Note that prices are still increasing

Hyperinflation - Inflation of 100% or more per year.

**All information from Quick Study Reference Guide:
John C. Mijares, "Macroeconomics", BarCharts, Inc., 2009, 2.