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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

Which country has the highest inflation rate?

The country is Zimbabwe. In 2008 inflation rates were 231,150,888.87% In 2006 the made a 60 trillion dollar note (60,000,000,000,000).

Should the current economic crisis make you better off having your money as cash or in the bank?

That depends on whether or not you feel your money is safe in the bank. Remember, all money in bank deposits is insured up to $250,000. That means that even if your bank fails, you do not lose any money (unless you have over $250,000). No one has ever lost money that was insured by this program. Most would advise to keep money in the bank and let it earn interest rather than keep it in cash. The reason is simple: If you hide it in your house, what if your house burns down? If you carry it around, what if you get mugged or lose your wallet? If you bury it in the backyard, what if you forget where you buried it? Basically, it is less risky to keep it in a bank even if that bank has a risk of failure rather than trying to safeguard it yourself.

How would a relatively high home inflation rate affect home country's current account other things being equal?

Inflation, which is the rise in prices of goods and services within a country, could cause a deficit, or at least an imbalance (depending on the length of the higher inflation time period) in the current account.

What are main Difference between inflation and deflation in points?

Inflation:

1. Inflation redistributes income in the favor of the rich and the profiteer class at the cost of the poor masses - the wage-earners and consumers.

2. Through its redistributive effects, inflation increases the inequality of income in the community by widening the gulf between higher income groups and lower income groups. The rich become richer and the poor become poorer during inflation.

3. Inflation is regressive in effect in the sense that it hits hard those who are already weak and cannot protect themselves. It is specially the middle class which suffers most due to inflation.

Deflation:

1. Deflation means falling prices in general which adversely affect the marginal efficiency of capital. Consequently, investment volume tends to contract causing unemployment to increase.

2. Deflation paves the way for depression. In a depressionary phase, economic activity contracts, scale of production is curtailed, output shrinks no new investment if forthcoming; on the contrary, investment is curtailed.

3. By reducing aggregate income, it also pauperizes every group in society. It inflicts on society the harsh punishment of mass unemployment.

What is the objective of security analysis?

Regular income - the income from the investment should be regular and consistent one. The high fluctuation is income stream is not suitable for the long-term growth.

Capital appreciation - the investment must yield regular income as well as growth in value i.e, capital appreciation. It is the difference between the selling price and purchase price.

Safety of capital - the capital invested in assets requires the safety. Safety is the important element which protects the loss of capital and return from the investments.

Liquidity - liquidity is the ease of convertibility or marketability of assets.

Hedge against Inflation - the inflation is the biggest problem we are facing today, hence the rate of return from the investment requires high yield to beat inflation rate.

These are the major objectives of an investor; to attain these objectives a careful and critical security analysis is necessary. The literature on security analysis can be consolidated to form three approaches to explaining the behavior of share prices and their valuation. These analysis are used to find out the answer for the question like, why share prices fluctuate, how they are determined, what to buy or sell and when to buy or sell.

Why would an expansionary gap lead to a change in inflation Why would a recessionary gap lead to a change in inflation?

Assuming that the aggregate demand curve does not move, the only way for the gap to be closed is by a shift in aggregate supply. These gaps cause a change in inflation expectations, moving the AS curve left (exp) or right (rec) back to long term equilibrium and changing the inflation rate.

What is an economic condition characterized by rising prices?

Inflation is an economic condition characterized by rising prices.

What is the effect of rate of inflation changes on the value of the firm?

Being that inflation is the decrease in the value of the dollar, it causes most firms to lose real value (they may still grow nominally). There are a few exceptions to this. For instance, if a firm is in a lot of debt, inflation helps them by making their debt smaller.

What is negative inflation?

Negative inflation means that the economy is in a deflationary period. That is, there is less money (supply of money) chasing the same amount of goods and services, leading to the increase in the value of the money.

What is inflation according to Hawtrey?

Inflation results from an increase in the amount of circulating currency beyond the needs of trade; an oversupply of currency is created, and, in accordance with the law of supply and demand, the value of money decreases. This is because excess demand means that aggregate demand is growing faster then the capacity of an economy to supply.

What is the value of a 1924 liberty dollar?

Assuming no mint mark the coin is common, circulated coins are valued at $22.00-$25.00

Does the US Government intentionally cause inflation by printing extra cash to pay it's bills?

The united states government does not actually create money, the government takes a loan out from the federal reserve, itself issuing currency printed from the us mint.

What is the value of a 1783 silver dollar?

The U.S. did not issue silver dollars until 1794. You may have a fantasy piece or a copy of an early Continental piece, but without more information it's difficult to say.

Prior to 1794 the U.S. adopted the Charles III Spanish silver dollar as legal tender. If you search through Google you will find Wikipedia information, including pictures, that will help you determine if this is what you have.

What is the value of a 1995 half dollar with peacock on the rear.?

If it is a U.S. half dollar the bird on the reverse is the same as that on all other U.S. quarters, halves and dollars - the American Eagle. Unless your coin is uncirculated it is only worth face value.

What is over inflation?

Over inflation is when (for example) a car tyre is pumped up higher than the manufacture recommends. A toy balloon blown up until it burst, is another example of something being over inflated.

Do interest rates rise when inflation declines?

Interest rates are simply the price of money. When inflation declines, interest rates typically decline also.

What is the responsible for inflation according to the demand-pull theory?

According demand-pull theory, what causes inflation is a strong demand and a lower supply. By having a greater demand, people pull prices up. Economists will often say that demand-pull inflation is a result of too many dollars chasing too few goods.

How dollar value is estimated?

The dollar value of a coin is based upon rarity, condition, date, and mintmark.

How much was 15 worth in 1955?

$15.00 in 1955 had the same buying power as $132.88 in 2016.

Who are responsible for the measuring of inflation rate?

All the Finanacial Institution. In America there was a law implemented by Lincon Govt. that FINANACE-INSURANCE AND REAL ESTATE not allowed to invest and collaborated in each others business ! But in Clinton govt. he took away this restrictions over business policy ! so it becomes F I R E - Finance insurance Real Estate.

When banks and other financial institutions loan to the people who are not really eligible to return it , the Liquid flow of money stops spreading in Market ! When there is no money in BANKS ..! Banks are flushed away and declare themselves debt destroyed ! So public money also sink so there purchase capacity also get lower ! And then Rule demand and Supply of economics applied AS USUAL ! IT'S A NONSTOP CHAIN REACTION ..And every thing's price raised lead us to Inflation ! it's very complex to describe full but i tried in brief and easy language ! remaining leaving on your logic