Uncertainty about Inflation?
Because of uncertainty about future inflation, the union devotes a large quantity of resources to monitoring inflation indicators in order to maximize its financial position. This illustrates which of the following: A. Variable inflation is associated with high transaction costs B. Inflation obscures relative price changes C. Inflation harms lenders and helps borrowers
About microeconomics?
Find the flaws in reasoning in the following statements. a. "A technological innovation that lowers the cost of produing a good might seem at first to result in a reduction in the price of the good to consumers. But a fall in price will increase demand for the good, and higher demand will send the price up again. It is not certain, therefore, that an innovation will really reduce price in the end." b. "A study shows that eating a clove of garlic a day can help prevent heart disease, causing many consumers to demand more garlic. This increase in demand results in a rise in the price of garlic. Consumers, seeing that the price of garlic has gone up, reduce their demand for garlic. This causes the demand for garlic to decrease and the price of garlic to fall. Therefore, the ultimate effect of the study on the price of garlic is uncertain."
Economy recession question?
When we say that the consumer has reduced his spending it means that he has reduced his demand for goods.When there is a low demand for goods producers will get less profit as their commodities are not being bought and because producers are not getting enough profit they will reduce the number employees in their company causing unemployment. When people are unemployed they don't have money to buy more goods so the demand from consumers will further come down and the producers will not not be willing to produce anymore as they are facing loss because the money spent by them on inputs is greater than than the profit which they get. The firm will ultimately shut down and other companies depending on this company for raw materials will also shut down and so the entire economy will slowdown.
What causes stagflation?
Stagflation (high unemployment and high inflation) might be inadvertently caused by an increase in business taxes and an increase in government spending. an increase in business taxes and an increase in business regulations. a decrease in business taxes and an increase in business regulations. a decrease in business regulation and an increase in government spending. a decrease in business regulation and a decrease in personal income taxes. I know its high taxes and unemployment. so would this be caused by an increase in business taxes and an increase in government spending??
Why is there an economic slowdown in India?
Global Slow down, delay in implementation of GST, cascading correction factor of GST, positive and negative impact of demonetization.Modi Govt has been good at rhetoric but they know ground reality. they also have to favor some business tycoons and also certain politicians interest.However, since they knew People are with them, they took 2 big decisions - demonetization and GST system.GST is indeed a break through which is set to increase tax coverage , minimize tax theft and increase potential of investment as rules are simplified. But it’ delay has demotivated foreign investors and its implementation has surely decreased investment by smaller businessman. however, things are now gearing up and Indian economy is set to enjoy its positive impact.However, FDI has not picked any grand success yet but Government has been able to speed up face of implementation. Which is appreciable.. However Global slowdown is messDemonetization failed to give any direct benefit but it has brought a fear in people who does business in black money. Tax return has increased and so has tx coverage. But it did slow down economy. But it also reduced cost of many items.GST & demonetization did correction process and it was sure that economy will be hit by this. It’s like a train which used to have lots of passengers. But due to ticket checking many people have stopped going without tickets. Good people are confused as ticket inspection has come up with new system- change always panics us.The slow down is so bad that to see the growth, India has to wait for another year and hence Modi government has to come up with various appeasement policies to cover it up. And these appeasement policies will put additional burden on economy.Eventually its vote politics. Modi government can’t let Congress win.. Remember 2G.. has people forgotten. yes they have..
Why would an employed consumer cut spending when other workers were being laid off?
workers laid off means slow/recessional business cycle... this affects consumer confidence adversely and the salaried workers are more likely to save even at lower interest rates than spend.
Why does the Australian dollar decline continuously? And how will it affect an average Australian?
Hello,The Australian Dollar is declining continously. In the last 3 months it has lost more than 11% against its US counterpart. This is happening so because China is the biggest reason behind its depreciation, for China is Australia's biggest trading partner. Any move in China marks a major move among the investors. The slowdown in China's economy and the correction taking place in its equity market is playing a major role in pressurizing AUD.Second reason is that due to China's slow pace growth and lack of demand from China, the commodity prices like copper, nickle etc. have seen major fall that they touched their 2008-09 levels, which is also keeping Aussie down as it is a commodity driven economy, depending upon mining activities. The Third reason, I guess would be comments from FED officials that the rate hike is likely to be there in the remaining part of this. Yellen will wait for the global economies and uncertainty to cool off, and will monitor the labour report, and then will decide upon changing rates or not. I hope this would have helped.Thank you :)