examines the medium term forecasting of inflation rate in Bangladesh. Four important macroeconomic variables which have inter relationship among themselves are considered in the study and three different VEC models are estimated starting from a two-variable model including money supply and CPI‚ and sub-sequentially adding some financial variables such as real GDP and nominal exchange rates. This paper empirically explores the present relationship between inflation and macroeconomic variables in the
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Define inflation. Assume that you live in a simple economy in which only three goods are produced and traded: fish‚ fruit‚ and meat. Suppose that on January 1‚ 2007‚ fish sold for $2.50 per pound‚ meat was $3.00 per pound‚ and fruit was $1.50 per pound. At the end of the year‚ you discover that the catch was low and that fish prices had increased to $5.00 per pound‚ but fruit prices stayed at $1.50 and meat prices had actually fallen to $2.00. Can you say what happened to the overall “price level”
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Eurozone stimulus looms as wage‚ inflation decline Governments and central bankers in the Eurozone are getting a little flexibility due to lessened inflation pressure‚ heads are turning towards stimulating economic growth. According to EU’s statistics office‚ they’ve hit the lowest annual inflation 1.8% in February. Some are raising expectations about the possibility of ECB cutting interest rates this year‚ because of the weaknesses in the Eurozone. Whereas opposed many are unsure
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DISTINGUISH BETWEEN COST PUSH & DEMAND PULL INFLATION [10 Marks] Can you remember how much you paid for the same items you buy now‚ two years ago? This increase in the general price level of goods and services in an economy is inflation‚ measured by the Consumer Price Index and the Producer Price Index; Commonly referred to as Inflation. There are however‚ different types of inflation’s‚ each affected by different factors. Aggregate supply is the total volume of goods and services produced by an
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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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’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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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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