Inflation, Unemployment and Growth Essay Example | Topics and Well Written Essays - 500 words

Inflation, Unemployment and Growth - Essay Example One disadvantage is the distortion in weighted averages. It may produce wrongful information on inflation. 3. The current inflation rate is at o.6%. The core rate of inflation is the annual rise in consumer expenditure. This rate was at 3.3%. The inflation rate for health care services was measured at 1.7%. This is with the gradual increase in the consumer price index of urban consumers. 4. A fall in price levels of a commodity over time is termed as deflation. One noteworthy thing brought on by deflation is a consumer’s purchasing power. More goods and services may be bought with little capital. It usually benefits people earning fixed income and consumers with less debt consumption. Japan’s experience with deflation started in the 1990’s. The creation of policies to end it did not assist. It did not create an increase in broad money which presented a problem. This led to an increase in deflation. There are more reasons to worry about deflation than inflation. One is the failure to repay debts. 5. Inflation is caused by the dependency of money-supply growth rate, and its relativity to the growth of the economy. To assist in reducing inflation, prices and wages need adjusting. This is to make other factors have a minimal effect on a trend line. 7. Internal method of valuing money involves the reverse value of prices. Increases in price levels mean that, the amount of goods purchased by a single unit also decrease. The external method of valuing money involves calculating the amount of foreign currency, which is bought from a domestic money unit. 8. The producer price index measures average changes in prices. These are prices expected by resident manufacturers for the total output produced. The use of the PPI is to measure the force being put on manufacturers by the costs of their raw resources. 12. Difference among the measures of unemployment, for example, U1 involves people who