Difference between anticipated and unanticipated inflation, Microeconomics

Explain inflation, and the difference between anticipated and unanticipated inflation.        

Answer  

Inflation is the persistent rise in the general price level in the economy.      

Anticipated inflation-

1) If the rate of inflation is anticipated then people take steps to make suitable adjustments in their contracts to avoid the adverse effects which inflation could bring to them

2)  Its effects are less substantial and less harmful

3)  Effects of anticipated inflation are avoidable.

Unanticipated inflation

1)  If the rate of inflation is unanticipated then people cannot make necessary adjustments in their contracts as they do not know what will be the rise in price level.

2)  Its effects are more substantial and more harmful

3)  Effects of unanticipated inflation are unavoidable.

 

Posted Date: 3/12/2013 4:07:48 AM | Location : United States







Related Discussions:- Difference between anticipated and unanticipated inflation, Assignment Help, Ask Question on Difference between anticipated and unanticipated inflation, Get Answer, Expert's Help, Difference between anticipated and unanticipated inflation Discussions

Write discussion on Difference between anticipated and unanticipated inflation
Your posts are moderated
Related Questions
What is What is Critical Temperature? Why Critical Temperature is Specified in Equation? Describe critical temperature specification...

Cost Functions for the Electric Power Sector Scale Economies in the Electric Power Industry Average Cost of Production in Electric Power Industry * Findings -

Suppose that doctors shift away from a fee-per-visit system and are instead paid set annual salaries. What effect will this have on the supply and demand situation for the health

meaning of opportunity cost under theory of cost

Define injections and withdrawals.   "The inflows in circular flow of income are known as injections". Investment, government spending and exports are there in injections "The


Use two market diagrams to explain how an increase in state subsidies to public colleges might affect tuition and enrollments in both public and private colleges.

Type of total outlay

3 factors by america palce at world economy leading edge 3 factors have taken pride of place in explanations of America's place at the world economy's leading edge in its level

Effects of weight loss A healthy body is required not only for the sake of health, but also for maintaining the standard frame of a body. A person experiencing the problem of weigh