Difference between anticipated and unanticipated inflation, Microeconomics

Assignment Help:

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.

 


Related Discussions:- Difference between anticipated and unanticipated inflation

Average level of nominal prices, Price Level:Overall average level of nomin...

Price Level:Overall average level of nominal prices in the economy can be calculated, most often as a weighted average of the prices of individualservices and goods (with weighting

Total cost function, A firm's production function is given by Q = √LK . Th...

A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is

Determinants of social demand for education, Determinants of Social Demand ...

Determinants of Social Demand for Education Certain levels of education like the secondary school and graduate level are considered as having productive value and are attribut

What are the parts of valuable economics paper, What are the parts of valua...

What are the parts of valuable economics paper? The consequence of economics research is an economic conclusion. Usually a valuable economics paper comprises three parts: a.

Describe the features of monopolistic competition, It is important to under...

It is important to understand the important characteristics of monopolistic competition. The knowledge of these features will enable the students to know how this form of market st

Estimation of national income, ESTIMATION OF NATIONAL INCOME: In India...

ESTIMATION OF NATIONAL INCOME: In India, the first attempt to estimate national income and per capita income was made in the year 1867-68 by Shri Dadabhai Naoroji. This was fo

What is the distinguishing characteristic of institutions, What is the dist...

What is the distinguishing characteristic of institutions in the public purpose sphere? The distinguishing characteristic of institutions in the public purpose sphere is that t

Concept of supply, #question.using a well illustrated diagram, explain the ...

#question.using a well illustrated diagram, explain the concept of producers equilibrium .

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd