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Inflation

 

            Is Inflation Accurately Measured in the Contemporary Economy?.
             There is a universal problem in every economy in the world. It is a very big problem that.
             is costly and very hard to forecast. Just what is this economic nightmare? The answer is.
             inflation. It is the most significant factor or risk to economic growth. Here in the United States,.
             we haven't had much inflation lately, but some wonder if inflation is being accurately measured.
             in today's contemporary Economy. This is a question I will attempt to answer in this paper.
             First off, what exactly is inflation? Inflation is a process in which the price level is rising.
             and money is losing value. Inflation does not occur when you have a one-time jump in price, but.
             rather an ongoing process where the price level is getting higher and higher over a period of time. .
             When this happens, the twelve pack of Coca-Cola that you could once buy with your $3.00, can.
             now only buy you a 6 pack because the value of your $3.00 went down. This is one of the effects.
             of inflation.
             Inflation can result from either an increase in aggregate demand or a decrease in aggregate.
             supply. When this happens we may get demand-pull inflation or cost-push inflation. An increase.
             in aggregate demand gives us demand-pull inflation. This occurs when there is an increase in.
             money supply, in government purchases, or in exports. Cost-push inflation results in an initial.
             increase in costs, like money wage rates and in the money prices of raw materials. .
             There are four other types of inflation that I will talk about and those are anticipated.
             inflation, unanticipated inflation, stagflation, and hyperinflation.
             When we are expecting inflation to occur, we have anticipated inflation. This kind of.
             inflation pays off because we know inflation is about to occur and we can take steps to prepare.
             for it. For instance, when the aggregate demand increases, the money wage does not change.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            


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