iii) Unemployment rate . a) Price rising due to an excessive growth in aggregate spending: b) Price rising due to an increase in the price of a firm's inputs. A) The inflation rate is too high. It's an economics term that means you have to spend more to fill your gas tank, buy a gallon of milk, or get a haircut. Inflation is the rate at which the prices for goods and services increase. C) there was a relatively constant increase in inflation throughout the entire period shown. We generally use “inflation” to refer to the overall purchasing power of money in our economy, but it can occur within sectors too. Inflation definition, a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (opposed to deflation). c) Prices rising due to an over rapid growth in the money supply: d) For instance, following the 2008 financial crisis, ... Stocks are considered to be the best hedge against inflation, as the rise in stock prices are inclusive of the effects of inflation. We have step-by-step solutions for your textbooks written by Bartleby experts! Measuring inflation – the Harmonised Index of Consumer Prices (HICP) In the euro area, consumer price inflation is measured by the Harmonised Index of Consumer Prices (HICP). Which of the following best defines the exchange rate? Marginal principle. Which of the following will shift the supply curve for textbook to the left: Your answer. See more. a. Inflation reduces the purchasing power of each unit of currency, which leads to increases in the prices of goods and services over time. There is a good argument that this is the best measure of velocity of money because you want to look for an increase in the cash people are looking to hold. Countries that have suffered horrendous inflation rates are Germany, Venezuela, Zimbabwe, and the United States during the Civil War. I. a structure as an interest-only loan II. Which of the following best defines inflation? Principle of opportunity cost. Which of the following best defines inflation? ... 2 1 Define ‘budget surplus’ Extract B (line 12). [3 marks] Extra space . b. B) The government should worry less about inflation and more about unemployment. A decrease in the demand of substitutes in production. Demand-pull inflation can also cause hyperinflation. Among the following which statement best defines the cost push inflation? A) the number of price increases within a given period of time B) the percentage of consumers in the total population looking for work C) the economic performance of key consumer product companies D) the changes in the cost of consumer products over time E) the average wage rate for a given … The rate at which one currency can be exchanged for another. 2. The cost of next best alternative forgone is best described by the: Select correct option: Principle of diminishing returns. Unexpected inflation is the inflation experienced that is above or below that which we expected. Relevance. 9 years ago. In the United States, that falls to the Bureau of Labor Statistics (BLS), and the result of this massive data collection effort is called the Consumer Price Index ( CPI ). Cost of reducing inflation. 3 Answers. Which of the following best describes inflation Select one of the options below as your answer:A. An 8 percent corporate bond that pays interest semi-annually was issued last year. There is an increase in purchasing power. Which of the following best defines cost-push inflation? The rapid increase in the price of a specific good, such as gasoline. D. A decrease in the number of buyers . 7. Since inflation is a measurement of the rise in the average price of all goods and services in the economy, somebody has to actually go out and collect all of that data. Cost-push inflation. Question: 1) Define the following terms: i) Savings rate . a current yield that equals the coupon rate … Define Inflation: A simple way to define inflation is “an increase in the price you pay for goods” but that only tells part of the story… It could also be seen as a “decline in the purchasing power of your money”. In economics, inflation (or less frequently, price inflation) is a general rise in the price level in an economy over a period of time, resulting in a sustained drop in the purchasing power of money. Therefore, citizens have an incentive to keep as little cash on hand as possible, which means that they have to go to the ATM or otherwise transfer money on a very frequent basis. In this article, we explore the causes and impact of hyperinflation. 2. However, from 2008 to 2015, the inflation rate is higher than interest rates – and so savers were losing out in this period. The rate at which the goods of one county can be exchanged for the goods of another. B.An organized plan for spending money C.A way to keep people from really enjoying life. The diagram below shows the annual rate of inflation in the UK between 2011 and 2014. The value of money decreases.C. D) Since the elderly live on a fixed income, the government has an obligation to keep inflation rates low. The difference between the inflation rate in one country and the inflation rate in another country. Different Types of Inflation . A.A method of figuring out the inflation rate. Which of the following best describes what the consumer price index is used to indicate? See below for the correct answer. Refer to the following figure when answering the next five questions: -Referring to the figure,we can observe that: A) inflation seemed to stabilize in the early years, 1996-1999, but it then spiked between 2002 and 2004.B) inflation was always under control in every year shown. When inflation is present, there is a real cost to holding cash (or holding assets in non-interest bearing deposit accounts), since the cash won't buy as much tomorrow as it could today. 14 B. Okun's law measures the tradeoff between the rate of inflation and the rate of unemployment. User: Which one of the following statements about demand-pull inflation is correct Weegy: Demand-pull inflation occurs when aggregate demand within the economy increases. A decrease in taxes on textbook suppliers . C. An increase in printing costs. 14. Ricardian view of inflation Neo classical view of inflation 13. Textbook solution for Survey Of Economics 10th Edition Tucker Chapter 23 Problem 18SQ. In economics, inflation is a general increase in prices and a decrease in the purchasing power of money. But there is more to inflation than that. Answer Save. It's one of the key measures of financial wellbeing because it affects what consumers can buy for their money. There is a general decrease in prices.B. 6. These types of inflation are differentiated from each other by the cause that drives the price increase. Over the years, unexpected inflation impacts employment, investment, and profits. Anonymous. which of the following statements best describes the characteristics of a hypothesis one of the steps of the scientific method? The hoarding may create shortages, aggravating the rate of inflation. 2. Reality principle. ii) Inflation rate . Which of the following events will lead to an increase in the demand for money? Unanticipated inflation reduces the validity of the information on market prices for economic agents. Which two of the following most likely apply to this bond today if the current yield-to-maturity is 7 percent? In physical cosmology, cosmic inflation, cosmological inflation, or just inflation, is a theory of exponential expansion of space in the early universe.The inflationary epoch lasted from 10 −36 seconds after the conjectured Big Bang singularity to some time between 10 −33 and 10 −32 seconds after the singularity. D. a decrease in the production of goods and services. Inflation is the persistent rise in the general price level of goods and services. |Score .9615|Jay901|Points 8306| User: Which one of the following best defines disposable income Weegy: The following best defines disposable income: income received by households less personal taxes. In lay terms, it means $1 won’t get you as much now as it did a decade ago. A period of inflation is best described as follows: When prices are going up, but the value wages is remaining the same or decreasing. Which of the following BEST describes hyperinflation? C) If the government increases the rate of growth of the money supply, the inflation rate will increase. As an example, assume inflation in an economy grows from 2% to 6% in Year 1, for a growth rate of four percentage points. Disinflation is a decline in the rate of inflation; it is a slowdown in the rise in price level. a) Price rising due to an excessive growth in aggregate spending b) Price rising due to an increase in the price of a firm's inputs c) Prices rising due to an over rapid growth in the money supply d) Prices falling over a period of time. This occurred in the period from 2003 to 2008. Inflation can arise from internal and external events; Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets. help please:) Which one of the following statement best describes what a budget is ? iv) Interest rate . A. Okun's law shows the relationship between the unemployment rate and the size of the negative GDP gap. High inflation is deemed unacceptable therefore governments / Central Bank feel it is best to reduce it. Hyperinflation describes rapid and out-of-control price increases in an economy. 100% correct and accurate. Which one of the following statements about Okun's law is correct? Now that we have covered the basics of inflation, it is important to note that there are many types of inflation. 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