Introduction What inflation is? Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole. Subsequently‚ it will cause purchasing power fall. In simple terms‚ it means that too much of money is chasing for one particular item. When too much of money is available‚ the seller may raise the price of which he is willing to sell. In the long run‚ inflation has the potential of erasing the purchasing power of the people. It is because when
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Distinguish between microeconomics and macroeconomics • Identify the broad macroeconomic policy objectives of governments • Define the terms inflation‚ deflation and disinflation • Explain the calculation of the CPI • Examine the accuracy of the CPI as a measure of inflation • Discuss the causes and effects of inflation • Explain the policies for controlling inflation Micro and Macro Economics • Microeconomics is the branch of economics that concerns itself with the study and behaviour of consumers and
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First of all‚ when we speak about inflation‚ we should make clear what is the exact defination of it. Inflation is one of the most important economic concepts. At its most basic level‚ inflation is simply a rise in prices. Over time‚ as the cost of goods and services increases‚ the value of for example of a dollar is going to go down because you won’t be able to purchase as much with that dollar as you could have last month or last year. When the purchasing power of a currency starts to decline
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INFLATION: Inflation is a sustained increase in the general price level leading to a fall in the purchasing power of money. Inflationary pressures can come from domestic and external sources and from both the supply and demand side of the economy. FACTORS OF INFLATION: Inflation is defined as the rate (%) at which the general price level of goods and services is rising‚ causing purchasing power to fall. This is different from a rise and fall in the price of a particular good or service.
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INFLATION The government control measures‚ all over the world‚ keep business cycles under control. What has gone nearly uncontrolled over the time is the problem of almost continuous increase in the general price level (this is the problem of inflation). The problem of inflation got accentuated since the early 1970s. It emerged as the most intractable economic problem for both theoreticians and policy-makeovers all over the world. Inflation has been a common problem of the developed and the developing
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Keomorokod‚ Im Meng and Chuop Vichet INFLATION Course Title: Fundamentals of Economics Professor: Meng Channarith April 09‚ 2013 CONTENTS Acknowledgement .....................................................................................................................ii Introduction .............................................................................................................................. iii Chapter One: Nature of inflation ....................................
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Inflation “Inflation is the rate at which the general level of prices for goods and services is rising‚ and‚ subsequently‚ purchasing power is falling.” Central banks endeavour to put an end to grave inflation‚ along with drastic deflation‚ striving to keep the extravagant growth of prices at the lowest level. For example‚ if there is 5% inflation in a specific country and the price of sugar is usually £3‚ it will spontaneously escalate from £3 to £3.15. Every government’s tries to keep a low
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INFLATION It can be stated that Inflation is the rise in prices of products as a result of the increase in the quantity of money. This definition however would be inefficient since for two reasons; 1. If we simply term inflation to be a rise in prices of certain products then we will be mistaken because prices might be rising in one sector of the economy yet falling in another sector. 2. We have to take into account that the process may be high this month but generally fall the following month
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economy in the world. In simple words‚ inflation is the rise of general level of prices. However‚ inflation is a much more complex phenomenon than simply the increase of prices. Inflation (or general inflation) is also identified with the fall of market value of money within a particular economic system. However‚ some economists prefer to use the term inflation to describe a rapid increase in money supply in a single economy. Generally‚ this is the main cause of the increase of prices. “There is
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INFLATION - ITS CAUSES and ITS EFFECTS ON VARIOUS SECTORS ON INDIA - September 2nd‚ 2010 WHAT IS INFLATION Defination: Inflation is defined as the rate at which the general level of prices for goods and services is rising and subsequently purchasing power is falling Measures of Inflation Inflation is measured by calculating the percentage rate of change of a price index‚ which is called the inflation rate. Consumer price indices Cost of living indices Producer price indices
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