Explain how inflation affects the functions of money. Inflation is the general increase in the price level over a period of time. Money is something that is generally acceptable in the exchange of goods and services. When inflation occurs‚ the value of money decreases as the same amount of money can’t buy the same amount of products like before. The purchasing power of money decreases. If the inflation rate is high and unanticipated‚ lots of problems can occur. People can lose confidence in
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How inflation affects the functions of money? Inflation alludes to a sustained general rise in the prices of goods and services. In other words‚ it means a rise in the level of cost of living. Money is anything that is generally acceptable by the society for the exchange of goods and services. There are different functions of money such as: To act as a medium of exchange –Money is used to trade in goods and services both internally and externally. In this way money eases the exchange of goods within
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Inflation is defined as a persistent increase in general price level. Inflation is measured by the proportional changes over time in some appropriate price index‚ commonly a consumer price index. General Price level refers to an average of all price in an economy and changes in reflect in the cost of living. Inflation however affects many thing one being function of money such as medium of exchange‚ store of value‚ unit of account and standard of deferred payments. Medium of exchange means
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The impact of inflation on the functions of money Money refers to any commodity which functions as medium of exchange or the settlement of a debt. In a modern economy bank notes and coins clearly form part of the money supply as they are acceptable in the settlement of all transactions. Moreover some transactions are settled by cheques drawn on bank deposits in current accounts (also known as sight or demand deposits). Thus current account deposits also form part of money supply. Deposits accounts
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MCD 2090 Tutorial 5 Money and Inflation Ch.12&13 Tutorial Questions 1. What is money? What distinguishes money from other assets in the economy? Briefly explain the difference between fiat money and commodity money giving examples of each. Why current deposits are included in the supply of money? Money is the commonly accepted set of assets in an economy that people regularly use to buy goods and services from other people. • Commodity money takes the form of a commodity
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the material world‚ and their behaviors are inevitably influenced more or less by money‚ and not always for the better change. While it is undoubted that money can possibly alter the thoughts and actions of people‚ short or long period‚ but this change didn’t last long for me. I used to be one of those people‚ who couldn’t resist the lure of the money‚ but what I experienced makes who I am now. I realized that money can reduce the amount of work and effort I need to do since my cousin who didn’t study
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Money and Inflation The nation’s economic stability has many factors which amount to inflation. Inflation may be caused by a number of problems‚ but there are some specific examples which have direct control over which way the prices and spending sway. Inflation simply means that the American dollar‚ in this case‚ is less valuable on the foreign exchange market and the gold standard is moved to higher prices; which simply means that more currency is needed to exchange for gold. Any slight
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Federal Reserve Bank of Cleveland Inflation‚ Banking‚ and Economic Growth by John H. Boyd and Bruce Champ B y now‚ everybody knows inflation is bad. Hyperinflations—when inflation rates are extremely high—are the horror stories‚ but few doubt the harmful effects of inflation rates in the teens either. Over the past several decades‚ central banks around the world have been pretty successful at dramatically lowering inflation rates. Can we now stop worrying about inflation? Probably not. There is good
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resort and also as a clearing agent. The Central Bank influences the money supply of a country supplying its currency. The money supply is a policy variable that is controlled by the central bank. Money demand is controlled by us. When a central bank increases the money supply it decreases the value of money which causes inflation this happened in Argentina where the government tried to stimulate growth in the economy by printing money but it had a negative effect and decreased the value of their currency
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stress disorder affects multiple areas of the brain‚ and that‚ in turn‚ affects an individual’s ability to function. Learning about PTSD and its effects on the brain is important for researching and advancing its treatment and prevention. I will be researching PTSD’s affects on the brain physically and chemically‚ then I will talk about PTSD caused by war and combat. Finally‚
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