in exchange for these payments are called fringe benefits. c. The three main categories of consumption spending are durable goods‚ nondurable goods‚ and stock purchases. d. An inflation that results from an initial increase in business costs is called wage pull inflation. *e. A major cost of highly variable inflation is that it causes extreme uncertainty which discourages long term investment. ANSWER: Value added equals value of sales minus cost of purchases from suppliers. Government payments
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the economy (Hudson‚ 2013) Price Stability: The phenomenon known as inflation is generally regarded as a gradual and sustained rise of the average level of prices. It is measured on an annual rate by the Retail Price Index. Governments will tend to try to keep the inflation rate percentage low. A popular methodology to controlling inflation is interest rates. Like inflation‚ interest rates also affect the RPI directly. Inflation has been known to heavily affect approval rates of presidency and other
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As President I would like to address some issues along with my council. In this essay I will address the problems at hand and give some solutions that I feel will help to jumpstart our economy. First I would like to mention that our population has grown substanually by 2‚000‚000 in the last year. The labor force has also increased with the population. As noted in the report 1‚360‚000 have entered the labor force in the past year. According to the report the increase of unemployment is greater than
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INTRODUCTION There are a variety of factors that impact the shape of the yield curve but monetary authorities influence greatly the shape of the yield curve .Monetary authorities influence the shape of the yield curve by initiating either a contractionary monetary policy or an expansionary monetary policy.A yield curve is a line that plots the interest rates‚ at a set point in time‚ of bonds having equal credit quality‚ but differing maturity dates. The most frequently reported yield curve compares
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the oil price shock is the increased cost of production due to increased fuel cost. This creates an inflationary effect (mainly cost push inflation which is accompanied by a situation of unemployment). Whenever there is an overall inflation in the economy‚ the cost of production would also rise causing a decrease in supply. On the other hand‚ inflation implies a fall in the purchasing power of people. In short‚ oil price fluctuation has adverse effects on the economy. The paper seeks to find
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and services‚ employment rises‚ and jobs are easy to find. ANS: F DIF: 1 REF: 23-0 NAT: Analytic LOC: The study of economics and definitions of economics TOP: Economic expansion MSC: Definitional 2. Macroeconomic statistics include GDP‚ the inflation rate‚ the unemployment rate‚ retail sales‚ and the trade deficit. ANS: T DIF: 1 REF: 23-0 NAT: Analytic LOC: The study of economics and definitions of economics TOP: Macroeconomics MSC: Definitional 3. Macroeconomic statistics tell us about
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Economics Exam Notes Question 1. (Chapter 31‚ pg759) * Impact of interest rate on spending * Analysis of events which change interest rate in the market * Policies to manage inflation/recession Impact of interest rate on the economy (ripple effect) To lower interest rate | | To increase interest rate | | | | | | Central bank buy securities in open market operations and increases money supply | | Central bank sell securities in open market operations and increases
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chronically rising prices‚ an abnormal ratio of domestic investment to income and relatively high growth in income per capita by historical standards. In this epoch of British history government policy principally tried to manage the level of inflation‚ the balance of payments‚ the level of investment‚ the rate of growth and the level of employment. The tools available to the government can broadly be divided into two categories manipulating the level of fiscal expenditure in the economy as well
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5. Governments intervene in the foreign exchange markets for all of the following reasons except to: a. Earn foreign exchange. b. Reduce economic uncertainty. c. Improve the nation’s export competitiveness. d. Reduce inflation. e. Boost or lower the value of domestic currency. 6. In order to boost the value of the euro relative to the dollar the FED should: a. Sell dollars for euros and the European CB should buy euros with Dollars. b. Sell dollars
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