1 Suppose that a country’s inflation rate increase sharply. Explain the following situations. (1 mark for each) a) What happens to the inflation tax on the holders of money? As inflation rate increases sharply‚ the price level also increases sharply‚ causing the real value of money that the holders have to decrease. b) Why is wealth that is held in savings account not subject to a change in the inflation tax? Due to the Fisher effect‚ the bank has already taken inflation rate into consideration. For
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Exam practice: paper 1 (SL and HL) Introduction to paper 1 Paper 1 has the same structure for both standard and higher levels. Paper 1: SL and HL Duration of paper 1 Focus and structure of paper 1 1 hour and 30 minutes Section A focuses on section 1 of the syllabus (microeconomics). Students must answer one question from a choice of two. Section B focuses on section 2 of the syllabus (macroeconomics). Students must answer one question from a choice of two. Structure of questions and marks earned
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Undergraduate study in Economics‚ Management‚ Finance and the Social Sciences Monetary economics R. Love EC3115‚ 2790115 2011 Monetary economics R. Love EC3115‚ 2790115 2011 Undergraduate study in Economics‚ Management‚ Finance and the Social Sciences This subject guide is for a Level 3 course (also known as a ‘300 course’) offered as part of the University of London International Programmes in Economics‚ Management‚ Finance and the Social Sciences. This is equivalent to Level
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2008 with a salary of $25‚000. In 2009‚ you receive a $2000 increase in your salary. CPI for 2009 (with base year at year 2008) is 108. The percentage increase in your real income is: a. 2% b. 3% c. Zero d. 1% 2. The annual inflation rate in an economy dropped from 10% two years ago to 2% last year. Which of the following apply? a. prices of consumer goods dropped by 2% last year‚ ii) prices of consumer goods uniformly rose at 2% last year‚ iii) prices of some consumer goods
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real estate market. In recent history stats have shown that the number of sellers selling due to emigration has doubled and this is mostly due to political instability. Factors that are also indirectly influenced by politics are things like rising inflation due to global food and oil prices which diminishes monthly disposable income. This all leads to a rising household debt-to-disposable-income ratio‚ he says. Even though we have seen some ups and downs in the real estate market during the years since
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Assessment: Germany 2011 Germany from 2004 until 2011‚ showed a positive trend with the GDP per capita. From $29‚684.33 in 2004‚ Germany boosted their GDP per capita up to $39‚187.01 in 2011‚ which is approximately a 50% increase. This shows that Germany managed to put its economy in an upward trend‚ although the Eurozone was struggling with its economic growth‚ particularly during 2009 and 2010. Similarly‚ GNI per capita of Germany in 2004 was $29‚938.63‚ yet by 2011‚ the GNI per capita was
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Introduction Inflation refers a rise in the general level of prices of goods and services in an economy and it is calculated for a period of time. The rising of general level of price of goods and services lessen the buying power of currency. As result inflation occurs‚ this results a reduction in the purchasing power per unit of money- a loss of real value in the medium of exchange and unit of account within the economy. An economy can be affected by the result of inflation on various modes. It
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Different macroeconomic policies can be implemented in order to achieve government’s main objectives of full employment and stable economy through low inflation. Philips Curve can be use as a tool to explain the trade-off between these two objectives. This essay will first explain the Philips Curve and its relation to inflation and unemployment. Then‚ the breakdown of Philips Curve will be analysed. Followed by an evaluation of short-run and long-run Philips Curve. Finally‚ it considers
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FINAL 224 Chapter 3: Economic Crisis & Recovery 1929-1939 Europe in a Depression(1929 till 1932-33) • Origin of the 1929 Downturn - The real origin of the slump had to be located with the US. This does not mean that there were no cyclical weaknesses elsewhere but it is mainly US bcz it had a major influence on the world economy. - The US witnessed 2 major shocks: 1- decrease (Curtailment) of foreign lending 1928-29 which had a deflation impact on
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CHAPTER 1 QUESTION: IDENTIFY AND EXPLAIN TEN (10) MACROECONOMIC VARIABLES AFFECTING A NAMED BUSINESS ENVIRONMENT. HOW CAN THESE BE REGULATED? INTRODUCTION In today’s world‚ no business operates in isolation without interacting with the environment where it operates. Irrespective of the nature of business whether public or private organization; manufacturing; service industry; local or international firm‚ its operations are inhibited by the environment in which it operates. During 2003-2007
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