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Explain who loses from inflation and who loses from unemployment?
explain who loses from inflation and who loses from unemplyment
Why can the goals of a dual mandate sometimes conflict?
The goals of a dual mandate can sometimes conflict because they may require different actions or decisions to achieve each goal. For example, if one goal is to promote economic growth and the other is to control inflation, policies that stimulate growth may lead to higher inflation, creating a conflict between the two goals.
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.
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.
Why can the goals of a dual mandate sometimes conflict?
The goals of a dual mandate can sometimes conflict because they may require different actions or decisions to achieve each goal. For example, if one goal is to promote economic growth and the other is to control inflation, policies that stimulate growth may lead to higher inflation, creating a conflict between the two goals.
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.
Why does increasing interest rates lead to a decrease in inflation?
Increasing interest rates lead to a decrease in inflation because higher interest rates make borrowing money more expensive, which can reduce spending and slow down economic growth. This can lead to lower demand for goods and services, causing prices to stabilize or even decrease, resulting in lower inflation rates.
What is a negative inflation rate?
when prices are not getting higher but lower.
