Answer these questions.Fill gaps.Missing words

Possible causes of demand-pull inflation include: A in the exchange rate . Fiscal stimulus e.g. via a in direct or indirect taxation or government spending. . Monetary stimulus to the economy e.g. a in interest rates.Effects of Deflation Consumption Demand-side (Malign/Bad). AD and AS diagram . Households defer spending on expensive items as they expect prices to in the future. term consumption may rise if deflation not expected to last. . Firms cutting costs will reduce wages and cause .... reducing consumption . Increased value of debt (debt burden increases: debt as a percentage of income) e.g. real value of mortgage debt increases. This will mean more of available disposable income will have to be spent on debt repayments. Increased debt burden will also deter further borrowing. ..... reducing consumption interest rates will rise increasing the real cost of interest payments and future borrowing costs and encourage saving.....reducing consumption house prices as real interest rates rise and wages fall reduces demand in the housing market. Reduces wealth reducing consumption . Lower wages, higher unemployment, falling GDP, increased debt burden, falling house prices will reduce consumer . . .... reducing consumption Supply-side (Benign/Good). AD and AS diagram . Increased technology and productivity leading to economic growth and lower prices will mean consumption ( of AD) e.g. telecommunications and airline flights are much cheaper than 20 years ago