Price stability: CPI, cost-push and demand-pull inflation

What this note covers

1. Price stability as a macroeconomic objective
2. The consumer price index: what it measures and how it is built
3. Worked example: calculating an inflation rate from CPI figures
4. Demand-pull inflation: too much spending chasing too few goods
5. Cost-push inflation: rising costs squeezing supply
6. Worked example: distinguishing inflation type from data in Belmoor
7. Consequences of inflation and the limitations of the CPI
8. How price stability is examined and what earns full marks

8 sections · 12 key terms & formulas · 6 common mistakes