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How would inflation be different if real income growth were higher Explain?
Wiki User
∙ 12y ago
it will not change the rate
Wiki User
∙ 12y ago
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Explain who loses from inflation and who loses from unemployment?
explain who loses from inflation and who loses from unemplyment
What might happen to aggregate supply curve if there was a significant increase in the cost of foreign oil?
The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.
If the inflation rate is higher than the GDP rate is there a recession?
The US govt. classifies a recession as 2 back to back quarters of negative GDP growth.
Explain why economists argue that productivity is important?
The higher the productivity , the higher the living standard of the country. It also contributes in growth in output and income of the country.
What are the different kinds of inflation?
On the basis of rate of Inflation, there are different types of Inflation. They are:Creeping Inflation.Walking or Trotting Inflation.Running inflation.Hyper or Galloping Inflation.Open Inflation.Suppressed Inflation.On the basis of rate of Inflation, there are different types of Inflation. They are:Creeping Inflation.Walking or Trotting Inflation.Running inflation.Hyper or Galloping Inflation.Open Inflation.Suppressed Inflation.
Explain who loses from inflation and who loses from unemployment?
explain who loses from inflation and who loses from unemplyment
Why higher inflation in US is not a problem?
Higher inflation in the US is not a problem because its citizen consume and invest more when they expect higher inflation.
What might happen to aggregate supply curve if there was a significant increase in the cost of foreign oil?
The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.
If the inflation rate is higher than the GDP rate is there a recession?
The US govt. classifies a recession as 2 back to back quarters of negative GDP growth.
Explain why economists argue that productivity is important?
The higher the productivity , the higher the living standard of the country. It also contributes in growth in output and income of the country.
What are the different kinds of inflation?
On the basis of rate of Inflation, there are different types of Inflation. They are:Creeping Inflation.Walking or Trotting Inflation.Running inflation.Hyper or Galloping Inflation.Open Inflation.Suppressed Inflation.On the basis of rate of Inflation, there are different types of Inflation. They are:Creeping Inflation.Walking or Trotting Inflation.Running inflation.Hyper or Galloping Inflation.Open Inflation.Suppressed Inflation.
What is the relationship between money and inflation?
There is nearly a perfect, 1:1 relationship between inflation and the money supply. Generally, printing more money is the source of inflation.
How do you control inflation in Nigeria?
Monetary PolicyWith growth of 3.8%, demand in the economy could be growing faster than capacity can grow to meet it. This leads to inflationary pressures. We can term this demand pull inflation. Therefore, reducing the growth of Aggregate demand, should reduce inflationary pressures.The Central bank could increase interest rates. Higher rates make borrowing more expensive and saving more attractive. This should lead to lower growth in consumer spending and investment. A higher interest rate should also lead to higher exchange rate, which helps to reduce inflationary pressure bymaking imports cheaper.Reducing demand for exports andIncreasing incentive for exporters to cut costs.Fiscal PolicyThe government can increase taxes (such as income tax and VAT) and cut spending. This improves the budget situation and helps to reduce demand in the economy.Both these policies reduce inflation by reducing growth of Aggregate Demand. In Nigeria's case, the economy seems to be growing reasonably strongly. Therefore, we can reduce inflationary pressures without causing a recession.If Nigeria had high inflation and negative growth, then reduce aggregate demand would be more unpalatable as reducing inflation would lead to lower output and higher unemployment. They could still reduce inflation, but, it would be much more damaging to the economy.
What is artificial inflation?
Artificial Inflation is inflation caused by a single person or group of people buying out most of the items of one kind and reselling them at a higher price.
What is a negative inflation rate?
when prices are not getting higher but lower.
How much do higher gasoline prices contribute to inflation?
It's the contrary, inflation contributes to higher gasoline prices. But not so much as everybody thinks. The major cause for increasing gasoline prices is the resource. Less resource for higher demand, higher prices
Advantage of inflation in India's economy?
Inflation is the sustained increase in price level. It usually has negative aspects to inflation, but it has some positive effects as well. Firstly, inflation is more desirable than deflation in most situations. This does not include hyper inflation by the way. Secondly, inflation shows economic growth, or at least it reflects some economic activity. The major positive aspect is that it helps smaller firms grow to larger firms. Assuming that both firms A and B sells similar goods. A is a large cooperation with economies of scales and B a smaller firm without economies of scale. Therefore the prices of goods A would be less than good B. Assuming that the inflation rate is 10%. The price of good A is $9 and inflation causes it to increase to $9.90. And for good B, since the cost of production is higher, it costs $10. And with inflation pushing it up to $11. The proportion of increase is similar, but the real price increase is different, firm A $0.90 and firm B $1. Thus firm B having a $0.10 increased revenue more than firm A. Resulting in a larger benefit, ceteris peribus cost of production does not increase in proportion and other factors equalized.
