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Effects of inflation:
On Income Earners:Those on fixed incomes or assets (fixed in nominal terms) lose. However, those on incomes, which are directly related to the price level, real incomes may remain relatively unchanged or may even increase.On Profits: Generally, profits increase when the inflation is the demand pull type and decline when the inflation is the cost push type. During demand pull inflation the prices of final goods and services tend to be more flexible in an upward direction than many other prices.On Lenders and Borrowers:Inflation tends to encourage borrowing and discourage lending. This is so because what is borrowed today which could have been used to purchase, say a bowl of gari today, would not enable the creditor to purchase the same bowl of gari when the loan is paid back. This is true only when nominal interest rate is fixed or rises at a lower pace than inflation.On Production: Demand pull inflation may lead to inefficiency in production since competitive pressures to improve both product and performance will be greatly reduced.Cost-push inflation however, puts a premium on efficiency.On Foreign Trade:Rising domestic prices can hurt exports.If domestic prices are rising faster than the rest of the world prices, exports will fall and imports will tend to increase and this will invariably affect our net exports and may have devastating balance of payment implications.
Facilitating Restructurings- rationale in era of globalisation: There has been some progress in the last few years in efforts to improve the framework for sovereign restructur
Policy Implications: The expansion of the services sector has wider implications for population, employment, and trade prospects of the economy, some of which are as follows:
why is international trade important for south africa
Lovers of classical music persuade Congress to impose a price ceiling of $40 per concert ticket.
If the short run method to produce Q quantity is with full time workers L=0.025*Q, COST OF WORKER IN THE SHORT RUN IS w=20226.154, how do you derive the value of Q
What is the difference between MRTS & MRS?
Productivity:Generally, productivity measures efficiency or effectiveness of productive effort. Productivity can be measured in several different ways. Physical productivity measur
A monopolist faces the following demand function for its product: Q = 45 - 5P The fixed costs of the monopolist are $12 and the variable costs are $5 per unit. a) What are the
Establish relationship between production and cost for a firm operation in perfect competition market in case of i phone
what are the practical importance of income elasticity of demand?
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