Posts Tagged ‘inflation’

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What Is Inflation? — Explained

The overall general upward price movements of goods and services in an economy often caused by an increase in the supply of money, usually as measured by the Consumer Price Index and the Producer Price Index. Over time, as the cost of goods and services increase, the value of a dollar is going to fall because a person will not be able to purchase as much with that dollar as he previously could. While the annual rate of inflation has fluctuated greatly over the last […]

Does Quantitative Easing Cause Inflation?

If you are going to print large amounts of money, it is going to increase inflation. We are going through an economic experiment. What we are trying now is to keep the economy going. Ever since the financial crisis in Japan, the Japanese population is shrinking and aging, the economy is staggering and not growing. The number of people in the economy is the biggest determinant of the GDP. Same is the case in the Europe, as the population […]

Economic Indicators and Their Impact on Currencies

In this video you will learn: How different economic indicators affect a currency? We will discuss the following economic indicators: Interest rates Inflation Interest rates: Economic indicators measure how strong an economy is. It is important to understand how strong an economy is. The strength of an economy has an impact on the price of a currency. These indicators are released as reports and the publishing times are released ahead of time. Interest […]

Inflation — An Explanation

In June 2005, Zimbabwe began offering an exchange of $5 for 175 quadrillion Zimbabwe dollars. In 2008, their rate of inflation hit 500 billion percent and soon after they abandoned their currency. So, how did it get so bad and what exactly is inflation? Well, often inflation is described as too much money chasing too few goods. If there is too much physical currency […]

Worried About Inflation

One member of the Federal reserve board of governors is worried about inflation and has voted to raise Interest rates for the last 2 months. The President of Federal reserve of Richmond is worried about inflation and has expressed skepticisim about the benefits of Fed's stimulus campaign. The relationships between employment and inflation has not changed and Fed should consider other issues like financial stability in setting monetary policy. He believes that […]

Why Can't We Just Print Money to Pay Off Debt?

Have you ever wondered why countries cannot just print more money to pay off their debts. The short answer to the quetion is Inflation. Inflation is a persistent and substantial rise in level of prices related to increase in volume of money resulting in loss of value of currency. Money has absolutely no intrinsic value. Money has value only when we believe it has and it is called Tinkerball effect. […]

Understanding Inflation — Changes in Purchasing Power

Most people think of inflation as a increase in price of commodities. But economists think of inflation as a decrease in the purchasing power of dollars. What causes inflation. Why do prices go up every year. The answer lies in who creates the currency. The Federal Reserve creates this piece of paper. In most countries around the world the Governments control their central banks. If they create more money in circulation then it creates inflation. […]

How Does the Bank Manage Inflation

In May 1997, the Chancellor granted the Bank of England, independence to set UK's official Interest rates. It also set the Bank's 2.5% Inflation target based on the Retail Prices Index. Since then the Official Interest rate is set monthly by the Bank's Monetary Policy Committee, the MPC. In January 2004, the target was changed to 2%, based on new Consumer Prices Index. The 2% Inflation target is consistent with the objective of low […]

What Causes Inflation

The prices we pay for Goods and Services will be influenced by the cost of producing or supplying them. The cost of Wages and Raw materials, Cost of manufacture, Transport etc. The price also reflects how popular something is. Its demand. If demand for something is high then the price will tend to rise. If something in short supply then that tends to push the price up too. Prices reflect the interaction between Demand […]

Inflation

In general the prices of most goods and services tend to rise over the time. Thats Inflation Just think about things we all pay for, like Food, Clothes, Insurance etc. As time goes by they will all cost more money. Buying these items in year 1955 differs from what you buy in year 2005. So your money buys less when prices rise. But ofcourse the wages […]

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