How is inflation typically measured? What are the different types of inflation? Why is it important to know which type of inflation we may be experiencing?
What will be an ideal response?
Inflation is typically measured by the CPI. The two types of inflation are demand-pull and cost-push. Demand-pull inflation is characterized by "too many dollars chasing too few goods and service." Demand-pull inflation is caused by total spending increasing faster than real GDP. Cost-push inflation is caused by anything that increases costs of production. Knowing which type of inflation we may be suffering from is important because each type of inflation requires a different policy prescription to combat.
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A) raising minimum balances on free checking accounts B) closing branches in low-income neighborhoods C) raising overdraft fees D) increased marketing of securities and financial advice to high-income customers
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Lessons about the nature of economic processes will likely emerge from the analysis of transitional economies
a. True b. False
What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?