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the supply curve shows the relationship between
There is nearly a perfect, 1:1 relationship between inflation and the money supply. Generally, printing more money is the source of inflation.
Decreasing the money supply will help with inflation. With less money to spend, the demand for goods will decrease, bringing down their cost.
Due to inflation the money value goes up ,people have more demand but they don't have supply so as it leads to high price of commodity, its the picture of inflation. So avoid this the better way to produce more to set a link between demand and supply.
Supply curve shows relationship between price of the particular commodity and the quantity supplied of that commodity at different price level.
M. Thomas Paul has written: 'A re-examination of the long run relationship between money supply and inflation in India' -- subject(s): Inflation (Finance), Money supply
The monetarist explanation of inflation operates through the Quantity Theory of Money, MV = PT where M is Money Supply, V is Velocity of Circulation, P is Price level and T is Transactions or Output. As monetarists assume that V and T are determined, by real variables, there is a direct relationship between the growth of the money supply and inflation. ChaCha again!
the supply curve shows the relationship between
There is nearly a perfect, 1:1 relationship between inflation and the money supply. Generally, printing more money is the source of inflation.
Decreasing the money supply will help with inflation. With less money to spend, the demand for goods will decrease, bringing down their cost.
There is not a direct link but high interest rates are associated with expectations of high rates of inflation. High inflation may be associated with high wage rises and so lower employment rates. Low employment rates would suggest excess labour supply. So, from one end of that chain to the other: high interest rates are associated with high labour supply.
Due to inflation the money value goes up ,people have more demand but they don't have supply so as it leads to high price of commodity, its the picture of inflation. So avoid this the better way to produce more to set a link between demand and supply.
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Supply curve shows relationship between price of the particular commodity and the quantity supplied of that commodity at different price level.
when prices go up freely due to the imbalance between demand and supply then that situation is called open inflation. this happens in a market economy .
No - The classical model is only realistic during periods of high inflation, because the stickiness of nominal wages and prices rise. This results in the Aggregate Supply Curve shifting left to it's next long-run equilibrium level much more quickly than during periods of low inflation.
the main cause of inflation is the growth of money supply