| Chapter 13 Outline |
| I. DEFINING INFLATION |
| A. Definitions and General Comments |
| 1. Inflation is defined as a continuing increase in the price level. |
| 2. It is important to distinguish inflation from a once-and-for-all increase in the price level. |
| a. This distinction is important because in cases of inflation, policies are
needed to keep the price level from continuing in an upward spiral; such policies are unnecessary with a one-time increase in the price level. |
| 3. During inflationary periods, prices in general are increasing. |
| a. Inflation does not mean that all prices are increasing. |
| 4. Deflation is a continuing fall in the price level. |