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quantity theory: Theory that too much money in the economy causes inflation.
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∙ 12y ago
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What is the relationship between inflation and money supply?
Money itself, as it is used in today, is an idea only. When money isn't backed by something solid it is less valuable than previously and causes things to cost more because of the lack of solidity of the money as it is only an idea and everyone is trying to capture the idea and make it concrete. Perhaps also because if there is more money in circulation in theory people have more money to spend, therefore they can afford to spend more.
Is running a taxi business a good idea in this economy?
No, running a new taxi business is not a good idea in this economy. There is too much competition out there, and it would cost too much money to start up, then what you would profit.
Which is the worse macroeconomic problem for t economy higher inflation or higher unemployment?
Inflation is worse than recession. Recessions end. Inflation is the most powerful force in the world and it keeps on keeping on. Inflation in the U.S., for example, has decreased the value of the dollar 84% since the beginning of 1969. The average rate of inflation in the U.S. is 4.1% on average for the past 30 years; at this rate the dollar loses half its purchasing power every 17 years. For detailed inflation data, see www.bls.gov. The data there includes an inflation chart sine 1913. Since the mid 1970s, the slope of the chart is up on an angle of approximately 45 degrees.
How does inflation lead to unemployment?
The idea comes from Economic cycle. See the Related Link below. The main idea is that while the economy is booming the unemployment is shrinking. People are needed to work/produce and employers are willing to pay more and more to get the most qualified workers, thus driving the wages up. They have nowhere to take the money from but to increase the price of their product/service. Thus driving the price level up (inflation). After reaching the highest point - the economy goes into crisis/recession. The main problem is overproduction. Production shrinks. Producers cut costs: decrease output, layoff people. In this period the unemployment begins to grow.
Why might it be a bad idea to create money to cover budget deficits?
Printing money to cover deficits creates inflation. This raises interest rates and prices which usually leads to more government expenditure and larger deficits.
What is the relationship between inflation and money supply?
Money itself, as it is used in today, is an idea only. When money isn't backed by something solid it is less valuable than previously and causes things to cost more because of the lack of solidity of the money as it is only an idea and everyone is trying to capture the idea and make it concrete. Perhaps also because if there is more money in circulation in theory people have more money to spend, therefore they can afford to spend more.
What is the main idea of monetarianism?
Monetarism is a school of economic thought that emphasizes the role of government control over the money supply to achieve economic stability and growth. It argues that fluctuations in the money supply are the primary cause of economic fluctuations, and advocates for central bank intervention to control inflation and stabilize the economy.
Is running a taxi business a good idea in this economy?
No, running a new taxi business is not a good idea in this economy. There is too much competition out there, and it would cost too much money to start up, then what you would profit.
Which is the worse macroeconomic problem for t economy higher inflation or higher unemployment?
Inflation is worse than recession. Recessions end. Inflation is the most powerful force in the world and it keeps on keeping on. Inflation in the U.S., for example, has decreased the value of the dollar 84% since the beginning of 1969. The average rate of inflation in the U.S. is 4.1% on average for the past 30 years; at this rate the dollar loses half its purchasing power every 17 years. For detailed inflation data, see www.bls.gov. The data there includes an inflation chart sine 1913. Since the mid 1970s, the slope of the chart is up on an angle of approximately 45 degrees.
How does inflation lead to unemployment?
The idea comes from Economic cycle. See the Related Link below. The main idea is that while the economy is booming the unemployment is shrinking. People are needed to work/produce and employers are willing to pay more and more to get the most qualified workers, thus driving the wages up. They have nowhere to take the money from but to increase the price of their product/service. Thus driving the price level up (inflation). After reaching the highest point - the economy goes into crisis/recession. The main problem is overproduction. Production shrinks. Producers cut costs: decrease output, layoff people. In this period the unemployment begins to grow.
What happen to investments from FleetBoston?
I dunno :D Umm...I have no idea what you are even talking about. Investing money? IN THIS ECONOMY? RIGHT!! Your CRAZY
Why might it be a bad idea to create money to cover budget deficits?
Printing money to cover deficits creates inflation. This raises interest rates and prices which usually leads to more government expenditure and larger deficits.
Why is tourism industry important?
Because the whole idea of the industry is to bring money into the economy. For example, a historical place, such as a castle could brig in visitors from all over the world and they will have to pay to go in. So the money will go towards your local economy.
Why is it a bad idea tp simply hide money is a safe place as a way to save?
Over a period of time, the cost of goods goes up (inflation) The money that you hid will not buy as much, so it is worth less. Money invested can grow over time. you can also have hidden money stolen or lost.
Any idea which are the most affected countries due to inflation?
You might want to check out Zimbabwe's inflation rate and check out what is happening in that country at the moment. latest inflation rate 2.3million% most places run at 4%
Which idea favored public works projects because they put money into the hands of consumers who would buy more goods and stimulate the economy?
Social security was the favored public works projects that put money into the hands of consumers who would buy more goods and stimulate the economy.
Which of idea favored public works project because They put money into the hands of consumer who would buy more goods and stimulate the economy?
Social security was the favored public works projects that put money into the hands of consumers who would buy more goods and stimulate the economy.
