What problems could inflation cause for Gwyn? Inflation can take its biggest toll on the reported profits of businesses with sizable inventories. Introduction of new products. Too much inflation can cause the same problems as low inflation. What best describes why inflation occurs? The following graph illustrates long-run and short-run Phillips curves for an economy that is currently at point A. Whether “the goods imported from a major trading partner become much less expensive” will cause inflation or recession is to be determined. 1-Jennifer buys toothpaste. correct: -changing the oil in your car yourself -cutting your own hair incorrect: -taking your car to the mechanic for routine maintenance -going to the barber. 1-not in the labor force 2-employed 3-unemployed 4-underemployed 5-not in the labor force. The business owner worries that the loan rate is too high. 1-does not indicate 2-per capita GDP 3-average income. Which of the following problems can inflation cause for suppliers? When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Which of the following is the process of getting oxygen from the environment to the tissues of the body? The Monetary Monopoly Model (Section 4.3) is a core model of Modern Monetary Theory. 11 million are discouraged workers. 1-Your neighbors grow and eat their own vegetables from their private garden. Fell free get in touch with us via phone or send us a message. it is the economic output when unemployment is at 0. Suppose there is uncertainty about the amount of inflation that will occur during the “Produce” period, between the signing of contracts and the collection of sales revenue. ***correct: -brazil -angola ***incorrect: -nicaragua -guinea. ***correct: -consumers substituting one good for another because of price -changes in the quality of the same good, over time -new products to buy and new ways for consumers to buy them ***incorrect: -the difference between nominal and real buying power -changes in the tax rate and therefore in take-home income. These types of inflation are differentiated from each other by the cause that drives the price increase. The real GDP of Country A grew by only 1% from 2011 to 2013, while the real GDP of Country B grew by 5% during that same time span. **incorrect: -The Great Recession did not affect the length of time people remained unemployed. following as factors that cause cost overruns on construction projects in Saudi Arabia: the effects of weather, the number of projects going on at the same time, social and cultural impacts, the project location, a lack of productivity standards in Saudi Arabia, the level of competitors, supplier manipulation, economic stability, The lender worries that the loan rate is too low. When Economy X is in a recession, the unemployment rate is 10%. chels16 chels16 01/14/2016 Business High School +5 pts. ***real higher: -The cost of living in the new city is 8% higher, and you’d get a raise of 10%. Which statement is not true of full employment output (Y*)? Liberty University ECON 214 InQuizitive chapter 8 Complete solution.docx, Houston Community College • ECONOMICS 2301, Hillsborough Community College • ACG 2021, Mcconnell_Brue_Economics_17th_edition Chapter 7, Liberty University ECON 214 InQuizitive Assignment 3 Complete solution.docx. Macroeconomics. They point toward the following factors which raise it: ADVERTISEMENTS: 1. ( long run trend of GDP vs. short run path(business cycle) ). In the long run, the economy will move to pointC . It can destabilize the economy, drive out foreign investors, and topple government leaders. Industrial Policy and the Expansion of the Scope of the Private Sector 2. Which of the following type(s) of unemployment are most associated with an economy that is experiencing dynamic growth and technological progress? The universe’s issues: Too far and too flat. ***incorrect: -Gwyn will need to pay more capital gains taxes. To give you a taste, let's briefly go over cost-push inflation and demand-pull inflation. In many places in economics, "real" variables need to be compared, in order to calculate GDP, effective interest rate and improvements in productivity. Out of that number, High levels of inflation aggravated agricultural problems, adding fuel to the fire of escalating unrest. Its cost of goods sold was $75,000, which meant gross profits of $25,000. (P2-P1/P1) x100. Two things tempt governments to enact inflationary policies. The government decides to expand its monetary policyby reducing the interest rates (repo rate) making credit cheaper for common people. difficulties in long-term planning. 2-Your mom made a sweater for you for your birthday. a) ... A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. For another thing, an economy with a low GDP but a strong (3) is healthier than an economy with a comparable GDP that is stagnant or declining. The 5% unemployment rate is due to structural and (3) factors. Diffusion ... Let us complete them for you. Now that we have covered the basics of inflation, it is important to note that there are many types of inflation. Match each form of unemployment with an example. If you like your job it is. Is inflation ever good? Some cases of supplier risk must be accepted by your business even if it causes problems. Substitution bias 3. All prices rise evenly during periods of inflation and deflation. Log in. The chained CPI is (1) than the traditional CPI. 1-non-market good 2-non-market good 3-underground economy 4-underground economy. However, in order to do so, she needs to find a loan. The greater the money velocity, the (2) goods and services are being traded. **incorrect: -GDP accurately captures all economic activity. Micro: -why did company c increase its advertising budget? -GDP is going to decrease in the near future. Here are some ways in which inflation affects businesses: 1. Cause: Ships and countries begin to trade globally. Given that people and companies would like to fully understand how their wages, assets, and debt evolve over time, the fact that inflation makes it more difficult to do so can be viewed as yet another cost of inflation. A speedboat engine contributes $9,000 to the total price, and a race car engine is worth $12,000. The fifth type, galloping inflation, is when prices rise 10% or more a year. If inflation is high in an economy there are three main problems it can cause: People on a fixed income (e.g. -The cost of living in the new city is 3% lower, and you’d be paid the same amount. Suppose the consumer price index for one year was 120 and for the next year it was 132. You can get your paper edited to read like this. Cost-push inflation can be caused by many different factors, like, as seen in the previous example, by a supply shock, which is probably the most common cause of cost-push inflation… The higher inflation may then raise people's expectations further causing a vicious cycle or inflation spiral. The Great Inflation of the 1970s, in truth, was a convergence of numerous factors, including years of bad economic policies, an oil embargo, and the untethering of the dollar to the gold standard. T/F. Which of the following scenarios would cause inflation to occur? *living standards: -Lupe examines the real per capita GDP of seven nations to determine which country might have the wealthiest citizens. The graph shows the relationship between money supply growth rate and average inflation for 257 nations over the years 1991-2011. ADVERTISEMENTS: Factors which causes Inflation (Factoring affecting Demand and Supply)! 8 million are unemployed workers Commodity speculators caused higher food prices in 2008 and 2009. 1-small 2-per capita GDP 3-real GDP growth rate. A country has a non-institutionalized civilian adult population of 263 million. Erodes Purchasing Power. ***correct: -The price of a ticket to a baseball game increases after the stadium is rebuilt. Ask your question. Click on the names of countries where the standard of living improved substantially between 1950 and 2000. The unemployment rate includes discouraged workers and underemployed workers. Note that every item may not have a match. 4-Darnell has a part-time job at the post office while looking for a full-time position as an accountant. 1. A deficit budget may be financed by the additional money creation. ***correct: -Long-term agreements become too risky for lenders, making it more difficult to obtain a loan. Even if prices and wages are flexible enough to adjust well for inflation, inflation still makes comparisons of monetary quantities across years more difficult than they could be. -Prices begin to rise, so firms increase output. Henceforth Banks are ready to give mo… No; a nation will normally also have periods of economic expansion that balance out recessions. Which of the following may be considered as part of the consumer price index? Round to one decimal place. They point toward the following factors which raise it: ADVERTISEMENTS: 1. An increase in payroll taxes leading to an increase in aggregate demand. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Thirty years ago Daniel bought a plot of land for $50,000 when the CPI was 50. 2-Actual GDP is below potential GDP. Learn vocabulary, terms, and more with flashcards, games, and other study tools. (Dr. - 1)i. related to the dead ii. ***real lower: -The cost of living in the new city is 12% higher, and you’d get a raise of 10%. When a country is facing the problem of budget deficits, cut in taxes will cause reduction in Government revenue and will therefore raise budget deficits. What could happen if the CPI were under-calculated? -measuring long-term economic growth having migraineiii. Rapidly rising prices will cause consumers to (as Samuel Goldwyn famously said) “stay away in droves”. **correct: -After the Great Recession, more than one-quarter of unemployed people spent more than 6 months looking for a job. Gwyn owns a furniture store. likely to cause deathiii. For example, in a recession, businesses may refrain from increasing their price levels to gain more customers (causing disinflation). 85 million are students, homemakers, retirees, etc. -Country A has a modestly high quality of life. Your parents bought their first car for $5,000. The causes are: 1. Which of the following problems can inflation cause for suppliers? It is the most common cause of inflation. A person who retires on a fixed income at age 65 will find that losing just 1% to 2% of buying power per year to inflation compounds to a considerable loss of buying power after a decade or two. Inflation . Import Duties and Market Protection 5. For example, inflation peaked at 84.463 percent in 1989 before it went down the following years and peaked again at 99.877 percent in 1996. You live in Atlanta and earn $95,600 a year. This happen when prices for food and domestic … Expectations of inflation – causes workers to demand wage increases and firms to push up prices. It starts with a decrease in total supply or an increase in the cost of that supply. Marshall benefits by receiving income so that he can continue to (1) goods and services while searching for a new job, which benefits society because it decreases the likelihood of an economic (2). 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