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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
What means that the value of each dollar increases in terms of what it can buy?
Just as a decrease in the value of a dollar is called inflation (it take more dollars to buy the same good during a period of time), the increase in the value of a dollar is usually called deflation.
Is the marginal benefit of a glass of water large or small?
water is necessary for life, is the marginal benefit of water is large or small?
...savings account be worth if inflation goes up? (For this exercise, do not consider interest paid.)
What are two measurements of government growth?
How many public services are out there and raise on taxes
What is 105 million dollars in 1920 worth in now?
$105 million in 1920 was worth about $1,244,340,000 in 2015.
refers to the cost fof time and effort that people spend triying to counter-act effect of inflation such as holding less cash andto make additional trip to the bank
What is the value of a 1904 silver dollar?
900 is not a rare date for Morgan Dollars. In circulated condition, it's worth about $12 -- a nice uncirculated one is worth about $35 However, you want to check the back for a mintmark. Look above the "DO" in DOLLAR for a small "S" or "O". And if it has an "O", then take a good magnifier and closely examine it for traces of a "CC" mintmark around the "O" -- this is a rare variety. If you have an "S" mintmark, and the coin looks like new or very close to new, then the values will be much higher -- $60-$240 If you have the rare "O over CC" mintmark, the values are even higher -- $25-$45 if well-circulated -- $75-$140 if very lightly circulated -- $250-$650 if uncirculated. "E Pluribus Unum" Note that the motto E Pluribus Unum ("From many, one") has appeared on dollars since 1878 and on all circulating U.S. coins since around 1916, so this generally isn't a distinguishing characteristic. The most important characteristics are denomination, date, mintmark, and condition.
What is the central bank and who control it?
Central banks are the regulator or supervisors of banking operations in a country. All member banks that operate in a country have to follow the rules laid down by them.
The government of the country usually controls their operations but in most cases they have powers to take decisions on their own.
In todays money how much 37 be worth in 1948?
$37.00 in 1948 had the same buying power as $373.99 in 2016.
How to take inventory using FIFO method?
FIFO stands for First-in-First-out, this means any merchandise that comes in first will be sold at that specific price first. For example, say I have candy bars, I have 50 on hand that cost me 85 cents, I later purchased 50 more that cost me 1.00. When I sale my products, say I sold 75, my inventory would go like this to figure out what I have on hand.
My original inventory is
50 @ .85 = 42.50
50 @ 1.00 = 50.00
Total ______92.50
Since I sold 75 bars total and I'm using FIFO, that means the first ones I purchased go out first....
50 @ .80 = 42.50
25 @ 1.00 = 25.00
Total______ 67.50
This leaves us on hand
25 @ 1.00 = 25.00
Is it good to have a high inflation rate or low?
Low inflation is considered good because it represents price stability, which encourages productive planning and investment.
What occurs when there is a lot of money in circulation but it is worth less and prices are rising?
Generally speaking, large amounts of currency in an economy where prices are escalating is termed inflation. Inflation meaning the expansion of the money supply. Often times this inflation is created by over spending by a central government.
What is the difference between bonus and fringe benefits?
A bonus when used in employment is typically a monetary compensation. A fringe benefit is a bonus as well, but sometimes benefits are not monetary.
Increases in Expected Future Interest Rates (forward rates) as well as adverse changes in those influences that might cause future interest rates to be higher than expected, such as higher inflationary expectations will typically cause secondary market prices for bonds to go lower.
This is a kind of Market Risk (risk to the Market Price of an investment) and can has a sensitivity that is typically measured using Modified Duration. Definitions of these terms can be found at www.davidandgoliathworld.com
What positive effects of inflation can be listed?
- It can benefit the inflators (those responsible for the inflation)
- It be benefit early and first recipients of the inflated money (because the negative effects of inflation are not there yet).
- It can benefit the cartels (it benefits big cartels, destroys small sellers, and can cause price control set by the cartels for their own benefits).
- It might relatively benefit borrowers who will have to pay the same amount of money they borrowed (+ fixed interests), but the inflation could be higher than the interests, therefore they will be paying less money back. (example, you borrowed $1000 in 2005 with a 5% fixed interest rate and you paid it back in full in 2007, let's suppose the inflation rate for 2005, 2006 and 2007 has been 15%, you were charged %5 of interests, but in reality, you were earning %10 of interests, because 15% (inflation rate) -- 5% (interests) = %10 profit, which means you have paid only 70% of the real value in the 3 years.
Note: Banks are aware of this problem, and when inflation rises, their interest rates might rise as well. So don't take out loans based on this information.
- Many economists favor a low steady rate of inflation, low (as opposed to zero or negative) inflation may reduce the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reducing the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control the size of the money supply through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.
- Tobin effect argues that: a moderate level of inflation can increase investment in an economy leading to faster growth or at least higher steady state level of income. This is due to the fact that inflation lowers the return on monetary assets relative to real assets, such as physical capital. To avoid inflation, investors would switch from holding their assets as money (or a similar, susceptible to inflation, form) to investing in real capital projects.
