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If an investment grows slower than inflation, its real value decreases.

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Q: What do you think happens to the value of investments that grow slower than inflation?
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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.


If full employment GDP is greater than equililbrium GDP what problem is this economy facing?

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What is the difference between expected inflation and inflation how does changing inflation expections affect short run philpse curve?

The first answer is self-explanatory. If consumers THINK a good will go up in price, then that good has a high expected inflation. Whether or not it actually does is it's actual inflation.This matters in the Phillips Curve mainly when dealing with businesses. Basically, if a business thinks it's costs are going to increase (inflation), it might not hire more people or might even lay people off to save money. Thus, as expected inflation rises, unemployment rises, just like the Curve says it would.


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Does the purchasing power of money decrease with inflation?

Inflation destroys the purchasing power of a paper fiat currency such as the dollar. In practical terms this means that when inflation is high the same number of dollars today will buy a smaller amount of goods or services tomorrow.Decrease. Inflation is when more dollar bills are printed. When you have more of something, the value always decreases per each of the something.

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