causes inflation
What is a cause of demand-pull inflation?
increase in consumer demand
What is the equation for quantity theory of money?
MV = PQ
Give one reason as to why high inflation is bad for the economy
- lower standard of living for people as cost of living increases
- loss of consumer and business confidence due to uncertainty
anything else that makes sense
Which of the following would NOT cause a shift in AS?a)The level of government spending
b)The costs of the factors of production
c)Incentives
d)The structure of the economy
a)The level of government spending
China/USA
explain how is inflation measured in NZ?
CPI, is a weighted basket of goods and services purchased by New Zealand households that is used to measure changes in the general price level, or inflation.
what are the variables in the quantity theory of money equation?
V= velocity of circulation
P= price levels
Q= Real output
which group of people is most negatively impacted by inflation?
people with fixed incomes
State the impact on aggregate supply of the increase in wage costs for businesses in New Zealand.
AS decrease
What mythical bird is known for rising from its ashes?
Phoenix
If there is a decrease in economic output, assuming all other factors stay constant, what will happen to price levels?
Price levels will increase
Explain one reason as to why high inflation may cause income distribution to become more unequal?
Those who are on fixed incomes may have no changes to their nominal wages whereas those on higher incomes may have the ability to negotiate wage increases in line with or exceeding the inflation rate.
State the impact of an increase in the cost of imported raw materials.
AS decrease
In which country did table tennis originate?
England
Would an increase in wage costs or increase in the cost of living payment have a larger impact on the inflation rate.
Wage costs
Will savers or borrowers be better off during times of low inflation? Explain why.
Savers are better off during low inflation because the purchasing power of their saved money stays constant, while borrowers may find it less advantageous since the real value of their debt remains higher.
What is the impact of cost of living payments being made to New Zealanders on AD/AS?
Increase in Aggregate Demand
What is Sheldon Coopers favourite number in the Big Bang Theory?
73
What will be the impact on inflation if money supply is decreased by 3% during a recession, in which economic output has fallen by 4%?
Decreasing the money supply to control inflation would be less effective during a recession as inflation would still rise by 1%.
What is the quirky name for a sudden heavy rainstorm in America?
Gully washer