--%>
Assignment Help - homework help

Inflation

Inflation is frequently described as "too much money chasing too few goods." Is this a satisfactory definition?

E

Expert

Verified

Inflation is a persistent rise in price level. Prices are derived by the interaction between demand and supply. Price rises when demand rises without any rise in supply OR supply falls without demand unchanged. When there is more money (demand) than what is available on sale (supply) we have inflation. Too few goods refers to low supply in comparison with high demand that is fuelled by too much money.

   Related Questions in Macroeconomics

  • Q : What are the strength and weakness What

    What are the strength and weakness of using per capital national income? give explained answer for query

    		•
  • Q : Normative goals of macroeconomic

    Commonly agreed-upon normative goals of macroeconomic policy do not include: (w) high employment. (x) price-level stability. (y) redistributing wealth through the rich to the poor. (z) economic growth. Can someone

    		•
  • Q : Reallocation of resources through budget

    Reallocation of resources: In case, the market economy fails or does not attain the desired social objectives, the government has to interfere via budget and reallocate resources accordingly. Through its budgetary

    		•
  • Q : Moentary policy a restrictive monetary

    a restrictive monetary policy is designed to shift the

    		•
  • Q : Macro economics policy (a) Do you think

    (a) Do you think that macroeconomic policy should be designed to achieve a measured unemployment rate of zero? Why or why not should this be the case?

    		•
  • Q : Equal Marginal advantage law Assume

    Assume that you receive $18 worth of “jollies” (that is, satisfaction, utility or pleasure) from the very first hole of golf played on a particular day, and that your extra jollies from succeeding holes drops $1 for each and every hole played. You should p

    		•
  • Q : What is substitutes Substitutes : The

    Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.

    		•
  • Q : From where Washington bureaucrats

    Can someone please help me in finding out the accurate answer from the following question. Typical Washington bureaucrats derive the maximum consumer surplus from: (1) Publicity in the Senate hearings. (2) Consuming the water. (3) Writing complex regulation. (4) Eatin

    		•
  • Q : Problem on rational consumption

    Whenever you dine at an “all-you-can-eat” buffet, the rational consumption prototype is to carry on eating till: (1) The restaurant goes bankrupt. (2) You have eaten as much food as it would encompass cost had you made your own meal at hom

    		•
  • Q : How banking evolved into the

    Give a short history of how banking evolved into the sophisticated operation. Start first with the Goldsmith and sum up with the Banking system which we experience nowadays.

    		•