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Q2) B. Explain some policies to reduce the high rate of inflation.
Q. Explain some policies to reduce the high rate of inflation.
Definition:
Inflation is an increase in the general price level of an economy.
The policies which control/reduce the high rate of inflation include-
- Monetary policy, in particular, increasing the rate of interest which reduces demand and that helps bring the rate of inflation under control or desired level.
- Contractionary Fiscal policy - Higher income tax or lower government expenditure will reduce aggregate demand (AD), leading to lower growth in the economy and less demand-pull inflation.
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- Discuss the major causes of inflation in South Sudan11 A survey of the opinions of eleven leading economists in a certain country showed that, because oil prices were expected to drop in that country over the next 12 months, they had reacted in the following way. Seven had lowered their estimate of the consumer inflation rate.Seven had raised their estimate of the gross national product (GNP) growth rate.Four had lowered their estimate of the consumer inflation rate but had not raised their estimate of the GNP growth rate. How many economists had both lowered their estimate of the consumer inflation rate and raised their estimate of the GNP growth rate for that period? economistsWhich of the following is NOT true about consequences of high unanticipated inflation Select one: a. It hurts people with fixed income b. It encourages consumption rather than saving c. It leads to investments into unproductive assets such as antiques, jewelry and foreign currency d. It encourages people to hold money in cash rather than in the bank e. It reduces the real value of cash you keep in your wallet
- Why is high inflation (5-10%) a bad thing for an economy? Group of answer choices -It increases contracting costs -Higher inflation tends to be associated with more volatility in prices -It often leads to currency depreciation -It is associated with lower economic growth -All of the above Only typed AnswerHigh inflation rates are considered detrimental to a country's economy. Please describe and discuss the 2 major reasons that may induce a particular product seller to raise its product price. Please discuss and describe how high inflation levels may affect negatively participants in the 2 major groups of economic decision-makers.3b. Suppose a country has a money demand function (M/P)d kY, where k is a constant parameter. The money supply grows by 12 percent per year, and real income grows by 4 percent per year. What is the average inflation rate?
- From 2015-2019, the Austrian accommodation and food services industries have grown in real terms by 4.1 %, the Austrian economy as a whole has grown by 8.7 %. Which of the following statements is true? a) Total production of the accommodation and food services industries in 2019 was larger than in 2015. b) Total production of the accommodation and food services industries has grown faster than the rest of the economy. c) The question can’t be answered because inflation is not corrected for. d) From the given numbers it follows that the sum of tourism receipts has grown during the respective period. e) During that period the contribution of the accommodation and food services industries to the Austrian economy has relatively decreased.Discuss the costs associated with high inflation.Analyze the economic forecast data for the three countries. Which country has the most challenging economic environment, and why? A. Brazil has the most challenging economic environment due to its relatively low GDP growth, coupled with the highest unemployment rate among the options. B. The United Kingdom has the most challenging economic environment because their inflation rate is anticipated to undergo the most significant decrease among the options. C. The United States has the most challenging economic environment due to having the lowest inflation rate among the options.
- With respect to the concept of inflation, it is correct to say that ________. options: A) inflation increases the purchasing power of consumer dollars. B) inflation and deflation are really almost synonymous in practice. C) the consumer price index is one way to measure inflation. D) inflation occurs when the amount of money taken out of the economy exceeds the amount of money put into the economy. E) inflation occurs when people have more money to spend as the quantity of goods available increases.q22- If there is inflation Select one: a. production is rising but prices are held constant b. the CPI is falling c. real GDP grows faster than nominal GDP d. nominal GDP grows faster than real GDPHow long would it take for the price level to double if inflation persisted at the following percentages? 17.5 percent per year 35 percent per year 3.5 percent per year
