CHAPTER 2 MEANING AND CAUSES OF INFLATION Inflation is considered a global phenomenon. It takes place because of rapidly rising prices of goods and services‚ resulting in the decline of the value of money. Definitions of Inflation: According to Prof. Crowther‚ Inflation is a state in which the value of money is falling and prices are rising. According to Prof. Kemmerer‚ Inflation means too much currency in comparison to the physical volume of business done. Keynes stated that the rise
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Name two causes of inflation. Explain how they work. Demand-pull inflation: As the name suggests‚ demand-pull inflation occurs as a result of increasing aggregate demand in the economy. Cost-push inflation: Cost-push inflation occurs as a result of an increase in the costs of production. How can inflation be caused by excess monetary growth? If there is more money in the economy‚ then there will be more spending‚ thus higher aggregate demand. Increases in the money supply result in higher
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CHAPTER ONE INTRODUCTION 1.1 Background of the Study Persistent public expenditure and inflation have become major concerns in both developed and developing countries. Extensive theoretical and empirical literatures have been developed to examine the relationship between Public expenditure and macroeconomic variables. The monetarists share the view that fiscal deficits are harmful to an economy. While some of the increases in the public expenditure have been associated with declining tax
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Inflation Inflation: A persistent increase in the price level‚ measures how much more expensive a set of goods and services has become over a certain period‚ usually a year. Consumers believe that low stable and predictable inflation is best for economy‚ too high and too low are not good. Measuring Inflation: To measure the average consumers cost of living‚ government agencies conduct household surveys to identify a basket of commonly purchase items and then track the cost of purchasing this basket
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Inflation vs. Unemployment Inflation and unemployment are two key elements when evaluating the economic well-being of a nation‚ and their relationship has been debated by economists for decades. Inflation refers to an increase in overall level of prices within an economy; it means you have to pay more money to get the same amount of goods or services as you acquired before and the money becomes devalued. For example 10 dollars seventy years ago had the same buying power that 134 dollars have today
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inequality. The focus of my analysis will be that of grade inflation in Barbados as a reflection of the wider Caribbean from the Marx perspective. Grade inflation according to Sociology‚ A Down To Earth Approach 11th Edition by James M. Henslin ‘occurs when higher grades are given for the same work thereby there is a general rise in student grades without a corresponding increase in learning’ or as explained by Goldman‚ grade inflation is defined as an upward shift in the grade point average (GPA)
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destroyed by heavy rainfall and destructive winds. Lives and valuable possessions were lost and homes and businesses were left with millions of dollars worth of damages. Subsequently‚ consumer‚ business and government expenditure increased in order to effect repairs‚ replace possessions and relieve the suffering. This extensive expenditure caused Jamaica’s GDP to increase. However‚ Jamaicans did not enjoy a higher standard of living. On the contrary‚ they were made worse off. This illustrates that GDP
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LETTER OF TRANSMITTAL Date: August 20‚ 2004 To: Professor Kahlil-ur-Rehaman From: SUMS Group Subject: Transmittal of Project We are given pleasure to transmit this report‚ “Relationship between Inflation & Employment” under the unprejudiced conclusions of Financial Management Course‚ during summer (3rd) semester 2004 of MBIT program‚ IBIT department‚ University of the Punjab. We have arranged our superlative efforts in originating this undertaking. We enormously enjoyed
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Exact prediction of inflation and unemployment in Germany Ivan O. Kitov Abstract Potential links between inflation‚ π(t)‚ and unemployment‚ UE(t)‚ in Germany have been examined. There exists a consistent (conventional) Phillips curve despite some changes in monetary policy. This Phillips curve is characterized by a negative relation between inflation and unemployment with the latter leading the former by one year: UE(t-1) = -1.50π(t) + 0.116. Effectively‚ growing unemployment has resulted
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better: inflation or deflation? Inflation is a phenomenon of rising prices without causing change in the levels of employment and output. Deflation‚ on the other hand‚ is a phenomenon of falling prices accompanied by a fall in the levels of employment and output. Both inflation and deflation are harmful for society and have undesirable economic consequences. But when the question of a choice between the two evils of inflation and deflation arises‚ the lesser evil is to be selected. Inflation is the
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