’Assess the view that inflation is always caused by an increase in aggregate demand’ In order to address this question it is first necessary to define both inflation and aggregate demand. Aggregate Demand is the total amount demanded by the whole economy‚ ie it is not related to one single market. Inflation is the persistent increase in the average level of consumer prices compared to the same time the previous year. This is a natural occurrence over time as wages rise and so the quantity demanded
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Six reasons why India’s rupee is in freefall Since July last year‚ the Indian rupee has fallen by more than 27% against the US dollar‚ one of the biggest declines among Asian currencies. Here are six main reasons for the steady slump in the value of India’s currency: UGE TRADE DEFICIT Continue reading the main story US Dollar v Indian Rupee Last Updated at 19 Jul 2013‚ 22:06 GMT $1 buys | change | % | 59.3950 | 0.00 | 0.00 | Since India imports more goods (in value terms) than it
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INFLATION – THE GOOD OL’ DAYS Learning outcome: Upon completion student will be able to: Correct for inflation when comparing the cost of an item over time. Scoring/Grading rubric: Each question is worth 10 points. Introduction: Everyone has heard someone say something like: “Back in my day…a cup of coffee cost only a quarter.” In this activity‚ we are interested in calculating how many current dollars that cup of coffee‚ or batch of cookies‚ or hourly wages would be equivalent to. 1
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When inflation is high‚ people increasingly fear that this will decrease their future purchasing power and their standard of living. Uncertainty about where prices of goods and services will be in the future makes it more difficult for people to make good economic decisions. That uncertainty is increased when prices are rising‚ since in these circumstances inflation is rarely stable and predictable. High inflation encourages approximate investments at the expense of more productive investments. It
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ECONOMIC POLICY DEBATE Vietnam ’s Rising Inflation and Asset Booms: An External Explanation Kenichi Ohno ABSTRACT Vietnam is experiencing a rising inflation and volatility in asset markets in recent years. The main reason for this is a large inflow of foreign exchange relative to economic size‚ which generates liquidity surplus‚ economic overheating and accumulation of international reserves. Exchange overvaluation is also occurring but it is partly offset by the falling US dollar to which the
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Inflation‚ Unemployment and Poverty: Still Major Problems of Pakistan Zoha Siddique Forman Christian College University Since Pakistan came into being‚ it’s going through hard times. From newly born country to getting sixty four year old country‚ sometimes it has given sacrifices and sometimes remained victim of inapt political system. For the long time‚ it is facing number of challenges and conspiracies which has weakened its foundations and so is the structure. Therefore‚
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The articles are talking about Inflation and the effects of it on the GDP of the United States compared to China. The first article is called “Catching the Eagle”. In December 2010‚ the Economist introduced a chart that made prediction of when China’s economy will overtake America’s economy. When the chart was first introduced in 2010‚ the Economist included a set of default assumptions for the decade ahead. They assumed that growth would average 7.75% in China over the subsequent ten years and 2
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Assess the view that inflation is always caused by an increase in aggregate demand Inflation is a sustained general rise in the price of goods‚ measured by the annual percentage increase in average prices. Inflation can be caused by an increase in aggregate demand‚ Aggregate demand is the demand for the gross domestic product (GDP) of a country‚ and is represented by the formula: Aggregate Demand (AD) = C + I + G + (X-M). An increase in aggregate demand can be caused by many factors such as a
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If inflation is too high in an economy the government will introduce policies to reduce the rate as a high rate can lead to disaster for a country. If the UK has excessively high inflation rates then they will not be able to compete on the exportation of goods against other countries as we will be charging higher prices which can then lead to a contraction on UK output and we become less efficient. It is also disastrous for individuals as there will soon be a wage-inflation battle as wages need to
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Free-Will Defense The Free Will Defense is an attempted solution to the problem of moral evil. Human beings are gifted with free will by God as a condition for genuine morality‚ trust‚ love‚ and the like‚ though it also makes possible the introduction of moral evil into the world. There are various questions that are asked with the question of God. Many ask questions like- why did God give humans the ability of free will knowing that they will abuse it? Is free will a condition for real humanhood
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