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Inflation
A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
1,474 Questions
How government control inflation?
As Inflation is defined as too many goods chasing too few goods, they can either raise interest rate in order to reduce consumption and make people save or reduce the money supply by selling out assets and then burn off the money they get away(to reduce the total money in the economy).
How much was a 1880 dollar worth by today's standards?
In 1883, the dollar was equivalent to approximately 5 cents. In other words, 5 cents in 1883 had the same buying power as 1 dollar has in 2006. 2006 is the most recent year that this utilities offers. http://www.westegg.com/inflation/
What are monetary measures adopted by central bank to curb inflation?
(A). Monetary measures: Monetary measures relate to the control in the supply and circulation of money in the country.
1. Bank rate policy: In case of inflation, the bank rate is increased; the supply of money is controlled.
2. Open market operation: During inflation, the central bank sells govt. securities and price bonds in the open market in order to contract the supply of money.
3. Variable reserve ratio: In order to control inflation, the central bank increases thereservation.
4. Credit Rationing: When there is inflationary pressure, the state bank adopts the policy of credit rationing.
(B). Fiscal Measures: Measures in connection with public borrowing, public expenditures and public revenues are called fiscal measures.
1. Public Borrowing: During inflation, increase the public borrowing, during deflation, decrease in public borrowing.
2. Public Revenues: In order to control inflation, the increase in public revenues by the Govt.
3. Public expenditures: Inflation is also controlled by decreasing the public expenditures by the Govt.
(C). Realistic Measures:
1. Increase the supply of goods and services: When the supply of goods and services is increased, the prices will come down.
2. Population planning: Control on population by adopting different measures of family planning will reduce the demand and finally prices will be controlled.
3. Price control policy: The govt. should adopt strict price control policy against the profiteers and hoarders.
4. Economic Planning: Effective economic planning is necessary to control the inflation in the country.
Who are the winners and losers from inflation?
The people that are considered winners during deflation are people on a State Pension, anyone holding a savings account, and people who use public transportation. The losers during this time are private retirees and those that hold annuities, and anyone who is looking to borrow money.
What is the inflation rate of India August 2010?
Inflation in India has come down to 9.97% in July 2010, when compared to June 2010 and because of RBI's tightening policy in July 2010, inflation is expected to stabilize at 7% in march 2011, expert says, so the inflation in the month of August 2010, should lies between 9-10%.
What are the favourable effects of inflation?
A+= Money loses its value
What is Inflation . Inflation is a rise in the general price level and is reported in rates of change. Essentially what this means is that the value of your money is going down and it takes more money to buy things. Therefore a 4% inflation rate means that the price level for that given year has risen 4% from a certain measuring year (currently 1982 is used). The inflation rate is determined by finding the difference between price levels for the current year and previous given year. The answer is then divided by the given year and then multiplied by 100. To measure the price level, economists select a variety of goods and construct a price index such as the consumer price index (CPI). By using the CPI, which measures the price changes, the inflation rate can be calculated. This is done by dividing the CPI by the beginning price level and then multiplying the result by 100. Causes of Inflation There are several reasons as to why an economy can experience inflation. One explanation is the demand-pull theory, which states that all sectors in the economy try to buy more than the economy can produce. Shortages are then created and merchants lose business. To compensate, some merchants raise their prices. Others don't offer discounts or sales. In the end, the price level rises. A second explanation involves the deficit of the federal government. If the Federal Reserve System expands the money supply to keep the interest rate down, the federal deficit can contribute to inflation. If the debt is not monetized, some borrowers will be crowded out if interest rates rise. This results in the federal deficit having more of an impact on output and employment than on the price level. A third reason involves the cost-push theory which states that labor groups cause inflation. If a strong union wins a large wage contract, it forces producers to raise their prices in order to compensate for the increase in salaries they have to pay. The fourth explanation is the wage-price spiral which states that no single group is to blame for inflation. Higher prices force workers to ask for higher wages. If they get their way, then producers try to recover with higher prices. Basically, if either side tries to increase its position with a larger price hike, the rate of inflation continues to rise. Finally, another reason for inflation is excessive monetary growth. When any extra money is created, it will increase some group's buying power. When this money is spent, it will cause a demand-pull effect that drives up prices. For inflation to continue, the money supply must grow faster than the real GDP. Effects of Inflation The most immediate effects of inflation are the decreased purchasing power of the dollar and its depreciation. Depreciation is especially hard on retired people with fixed incomes because their money buys a little less each month. Those not on fixed incomes are more able to cope because they can simply increase their fees. A second destablizling effect is that inflation can cause consumers and investors to changer their speeding habits. When inflation occurs, people tend to spend less meaning that factories have to lay off workers because of a decline in orders. A third destabilizing effect of inflation is that some people choose to speculate heavily in an attempt to take advantage of the higher price level. Because some of the purchases are high-risk investments, spending is diverted from the normal channels and some structural unemployment may take place. Finally, inflation alters the distribution of income. Lenders are generally hurt more than borrowers during long inflationary periods which means that loans made earlier are repaid later in inflated dollars.
What is the formula of calculating increase in real GDP?
Nominal GDP/CPI*100
answer will be in $ amount
According to the Cabinet Office of Japan and as reported by the Trading Economics site, the GNP in Japan averaged 500860.23 JPY Billion from 1994 until 2014. The Gross National Product in Japan decreased to 518958 JPY Billion in the third quarter of 2014 from 521099.80 JPY Billion in the second quarter of 2014.
Is government responsible for rising inflation?
Rising inflation will force the government's cost of borrowing money to rise sharply. With the US government currently carrying 17 TRILLION dollars in debt - 40% of it incurred in the last 5 years - a spike in inflation would force the Federal Reserve to raise interest rates (currently at or near zero), which would jack up the cost of servicing the government debt. This would cause real government spending on welfare programs and transfer payments to fall, because the government cannot borrow more than it is doing now. The result would probably be runaway inflation and a new Great Depression.
Similar to what Argentina is suffering now, with 40% per month inflation and the government practically facing an uprising.
The copper in a US cent made before 1982 is worth almost 2 cents. Those made after 1982 are worth much less than 1 cent (but the cost of producing them is about 1.5 cents). Both types were made in 1982. But before you start sorting your pre- and post 1982 pennies, you should know that there is an administrative order prohibiting the "melting or exporting of large numbers of one and 5 cent coins" which could result in a fairly large fine.
How much would 120 million dollars in 1925 be worth today?
$120 million in 1920 is worth about $1,422,100,000.00 in 2015 dollars.
How does inflation affect farmers?
Effects of inflation on Farmers:
The price of farm products goes up faster than costs. Costs lag behind prices of product received by the farmers. It has been observed in India that inflationary tendencies during war and post-war periods have helped farmers in paying off their old debts. Moreover, farmers are generally debtors and have to pay less in real terms, while the land revenue, taxes, etc., do not rise much. Thus farmers generally gain during the periods of inflation.
A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.
Advantage of inflation in India's economy?
Inflation is the sustained increase in price level.
It usually has negative aspects to inflation, but it has some positive effects as well. Firstly, inflation is more desirable than deflation in most situations. This does not include hyper inflation by the way.
Secondly, inflation shows economic growth, or at least it reflects some economic activity.
The major positive aspect is that it helps smaller firms grow to larger firms. Assuming that both firms A and B sells similar goods. A is a large cooperation with economies of scales and B a smaller firm without economies of scale. Therefore the prices of goods A would be less than good B. Assuming that the inflation rate is 10%. The price of good A is $9 and inflation causes it to increase to $9.90. And for good B, since the cost of production is higher, it costs $10. And with inflation pushing it up to $11. The proportion of increase is similar, but the real price increase is different, firm A $0.90 and firm B $1. Thus firm B having a $0.10 increased revenue more than firm A.
Resulting in a larger benefit, ceteris peribus cost of production does not increase in proportion and other factors equalized.
How much would one million us dollars in 1962 be worth today?
$200,000 in 1970 would be $1,183,500 in 2013.
Trends of inflation for last 5 years?
This space is for answering "What is the rate of inflation in America in the last five years?" [advanced answering tips]
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The 1922 Peace dollar is the most common and highest mintage of the series, it's worth around $21.
1922 Peace dollars are the highest mintage most common of the entire series. Average value for a circulated coin (regardless of mintmarks) is $31.00-$41.00.
Why the inflation rate of zimbabwe is so high?
Inflation rate of Zimbabwe is so high because there is no single manufacturing unit is establish. all commodities from needle to aircraft were imported. they take million of loan from foreign banks
Inflation takes place when someone buys an item (say a camera) for more than it is worth. That person then sells it on for a higher price, and this continues until this item is sold for less than was paid for it (a lot less). This basically means that money has dissapeared.
How can a society increase its potential output?
a society can increase its potential as follow 1 increase in productivity 2 increase in investment 3 inprove on man-power development
Current Pakistan's GDP is US $167 billion, which makes it the 48th-largest economy in the world or 27th largest by purchasing power adjusted exchange rates. Pakistan is South Asia's second largest economy.
Currently All Pakistan Goods Transport is playing its role in the growth of Pakistan by providing its transportation and logistics services all over the country.
What is the value of a 1991 silver dollar?
Assuming you are referring to the U.S. bullion piece carrying that denomination, known as an American Silver Eagle, this item would be worth just about the current spot price of the one ounce of silver it contains.
Although it is a legal tender coin, that you could spend for its $1 face value, its actual value is more accurately determined by its metal content.
Macroeconomics is economics within the world, as how countries make decisions and how societies organize.
(Microeconomics is economics within businesses, as how companies make decisions.)
What would one million dollars in 1970 be worth today?
In 1862 the United States passed a law known as "The Legal Tender Act" as a part of this law was 'the Parity Act" which stated in relevant part that all legal tender will hold the face value of the note. So in essence a dollar in 1933, 1950 and in todays money is still worth the same because 'law' says it MUST be. The buying power of that money however does change, in 1950 a loaf of bread cost $0.14 per loaf today it would cost $2.00 per loaf (avg) - so if we use that buying power as a guide the dollar in 1950 was worth 7.5 dollars in 2009 (simplified). Source: 73D Congress 1st session report #43 (1933)
