How do economists measure inflation? What is the major cause of inflation?

Solutions

Expert Solution

Economists use a basket of goods that are geenrally used by the household in the market and they check the increase in the price of those goods, for example if the average price of basket increase by 10% over a year, then the inflation in the market has increased by 10%.

there are two majkor causes of infliton in the market they are:

Demand pull inflaiton, if the demand for the goods in the market increase a lot then the cost of the goods increase and that lead to an inflation
Cost push inflation, if the price of the input goods increase in the market then the price of the goods increase and that leads to a higher price and inflation in the market.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Inflation How do economists measure inflation? Did the CPI recently increase or decrease? Visit the Bureau...

Inflation How do economists measure inflation? Did the CPI recently increase or decrease? Visit the Bureau of Labor Statistics website and explore the Consumer Price Index section. Summarize the latest press release and explain what caused the index to increase or decrease. (You can also talk about COVID-19)

Unemployment How do economists measure unemployment? Why is unemployment not a perfect measure of joblessness? Visit...

Unemployment How do economists measure unemployment? Why is unemployment not a perfect measure of joblessness? Visit the Bureau of Labor Statistics website and explore the national unemployment rate section. What is the current level of national unemployment? Has it increased or decreased? Explain why the unemployment rate has changed. (You can also talk about COVID-19)

How do statisticians and economists measure GDP? Specifically, what is the formula used? Define the component...

How do statisticians and economists measure GDP? Specifically, what is the formula used? Define the component parts of the equation. I need 500 words and all the answers of all the parts in the question

1. (a) What are the six major factors that cause demand to change? (b) How do...

1. (a) What are the six major factors that cause demand to change? (b) How do each change demand? (c) Draw a graph to illustrate the change for each factor. (d) How does each shift affect equilibrium price and quantity? 2. What is the relationship between price and quantity supplied?

1. (a) What are the six major factors that cause demand to supply? (b) How do...

1. (a) What are the six major factors that cause demand to supply? (b) How do each change supply? (c) Draw a graph to illustrate the change for each factor. (d) How does each shift affect equilibrium price and quantity? 2. Suppose the price of an input good used to make chocolate decreases. Explain and graphically show what will happen to equilibrium price and quantity of chocolate. 3. Suppose the price of gummy worms decrease. Explain and graphically show what...

Some economists claim that inflation is always a “monetary phenomenon.” What do they mean by this...

Some economists claim that inflation is always a “monetary phenomenon.” What do they mean by this claim and are they correct?

What is the GDP deflator and how could be used to measure inflation

1. A. What are the stock market indices? What do they measure? How do we measure...

1. A. What are the stock market indices? What do they measure? How do we measure stock market’s overall performance? B. What are the EAR and APR? What’s the difference? How to convert APR to EAR under different frequencies of compounding? C. The relation between interest rate and pricing of financial securities. D. What’s the purpose of building investment portfolios? What’s the difference between firm’s specific risk and market risk. Which one is diversifiable? Which risk is systematic? Which one...

What were the major areas of disagreement between John Maynard Keynes and the classical economists? Do...

What were the major areas of disagreement between John Maynard Keynes and the classical economists? Do you believe that either of these schools of thought are relevant in today's economy?

Why do we have to measure unemployment? How and why minimum-wage laws cause unemployment in the...

Why do we have to measure unemployment? How and why minimum-wage laws cause unemployment in the economy? Is trade unions are good or bad for economy? Comment “not all the adults are willing and able to work” In terms of loss of jobs, which sector in Kuwait likely to be affected most? Why?

Subjects