Inflation
Inflation is frequently described as "too much money chasing too few goods." Is this a satisfactory definition?
Expert
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.
Describe any two measures by which a Central Bank can attempt to decrease the gap. Answer: Central bank can decrease this gap by adopting two measures illustrated b
Law of supply: It is the claim which, other things equivalent, the quantity supplied of a good increases whenever the price of the good increases.
In calculating the GDP national income accountants:
Tariffs: -are also called import quotas. -may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs). -are per unit subsidies designed to promote exports. -are excise taxes on goods exported abroad.
Equilibrium quantity: It is the quantity supplied and the quantity demanded at equilibrium price.
What is "demand-pull" inflation?
‘Over the precedent 30 years, and particularly as our entry into the EU, imports (and exports) as a proportion of GDP have increases considerably in the UK. What influence has this had on the value of multiplier in the UK?’
A change in tax rate changes the IS equation, LM equation remaining the same. Let same, let us suppose that the government raises the tax rate from 20 percent to 25 percent<
Why the borrowings by Government are taken as capital receipts?
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