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If the inflation rate is higher than the GDP rate is there a recession?
Wiki User
∙ 15y ago
The US govt. classifies a recession as 2 back to back quarters of negative GDP growth.
Wiki User
∙ 15y 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
Suppose a borrower and lender agree on the nominal interest rate to be paid on a loan and the inflation turns out to be higher than they expected Is the real interest rate on this loan higher?
the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.
Why is food prices so much higher than the 1933?
Basiclly, items are much more expensive now than in 1933 because of the recession.
How is inflation and employment levels related?
Inflation causes people to save on everything. This makes commerce to sell less. Selling less causes unemployment. Unemployment and low consumption cause recession. No inflation implies on high consumption which must be controlled as well, but is much better than inflation and recession.
When using fiscal policy the government will do just the opposite to control inflation than it does to control?
recession..A+
Explain who loses from inflation and who loses from unemployment?
explain who loses from inflation and who loses from unemplyment
Suppose a borrower and lender agree on the nominal interest rate to be paid on a loan and the inflation turns out to be higher than they expected Is the real interest rate on this loan higher?
the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.
Why is food prices so much higher than the 1933?
Basiclly, items are much more expensive now than in 1933 because of the recession.
How is inflation and employment levels related?
Inflation causes people to save on everything. This makes commerce to sell less. Selling less causes unemployment. Unemployment and low consumption cause recession. No inflation implies on high consumption which must be controlled as well, but is much better than inflation and recession.
When using fiscal policy the government will do just the opposite to control inflation than it does to control?
recession..A+
When the actual inflation rate is greater than the anticipated inflation rate what is most likely to suffer?
The question is incomplete.
What does a lower interest rate mean for savers?
It means that they are getting less money for deferring expenditure and saving instead. However, it is not the low nominal interest rates which matter but what the "real" interest rates are. This is the difference between the nominal interest rate and the rate of inflation. An interest rate of 2% when inflation is 0% is good news for savers but an inflation rate even as high as 10% is bad news if inflation is higher than 10%.
What is dis inflationary pressure?
Inflationary pressure is when the price of things in general increase at a higher rate than wages, thus causing a financial strain.
Why an increase in income does not necessary mean an increase in welfare of the people?
There are many reasons why this might be the case; one of the simplest is inflation (meaning increase in how much things cost). If the rate of inflation is higher than the rate of increase in income, then you have more money but it buys less.
What is the relation between recession and unemployment?
A recession is defined as a period of general economic decline; specifically, a decline in the country's GDP (Gross Domestic Product) for two or more consecutive quarters. During a recession, the country's liquidity is not at its best. Companies cannot easily raise fresh capital for expansion of their business. Maintaining customer base and profit would be the main aim for companies during a recession. During a recession the company would do either or both of the following: 1. reduce unnecessary expenditure (cost optimization) and/or 2. reduce unnecessary work force (resource optimization) As a result of these two steps, the number of employees in the company may come down. resulting in unemployment. Similarly, the company would not be in a position to expand its operations. Hence the number of fresh employment positions that would be created by the company would also take a hit. This would also cause unemployment.
If the inflation rate in the US is greater than the inflation rate in Sweden other things held constant the Swedish currency will?
The Swedish currency will appreciate against the US dollar.
When economy is moving in recession process demand is increasing supply is decreasing prices are increasing than what is that type of inflation?
I think you're referring to a so called Running Inflation. Check the link for more information.
