which of the following problems can inflation cause for suppliers?
***incorrect: -The supply of money decreases. Drag the labels to the appropriate country. Correctly classify each situation that GDP cannot measure. Macro: -what effect did the interest rate have on inflation? plucking (Dr. - 4)i. pickingii. When we think of inflation we usually think of how it affects us as consumers. *not included in GDP: -a microprocessor chip sold to a computer manufacturer -a smartphone manufactured overseas and sold locally *included in GDP: -landscaping on a residence -a computer sold to a retail consumer. Which of the following can be causes of frictional unemployment? These negative consequences can, in turn, have an effect on output and the employment rate under certain circumstances. This happen when prices for food and domestic … Get help with your Macroeconomics homework. Take 2014 as the price index base year. However, if other economic variables do not move exactly in sync with inflation, or if they adjust for inflation only after a time lag, then inflation can cause three types of problems: blurred price signals. Match the use of GDP data to the appropriate situation. The higher inflation may then raise people's expectations further causing a vicious cycle or inflation spiral. Which questions explore microeconomic topics and which explore macroeconomic topics? 1-gov debt 2-printing money 3-a sluggish 4-surprise. *business cycle: -Brad looks at real per capita GDP to determine what impact the recent recession has had on economic activity. Q: Which of the following problems can inflation cause for suppliers? 4-Your child is paid $40 to walk your friends’ dog while they are on vacation. Factors Affecting Demand: Both Keynesians and monetarists believe that inflation is caused by increase in aggregate demand. The traditional CPI has a strong (4) bias. An increase in the money supply — that is, a government literally printing money — can provoke inflation if it outpaces economic growth. The universe’s issues: Too far and too flat. Sometimes, unemployment is due to (2), which is the introduction of new (3) and technologies that leads to the shutdown of other industries and jobs, as some jobs become (4). 5-Olivia can’t find a job in her college major, so she’s no longer looking for work. Q: The graphic shows the timeline of production, beginning with preparations and ending with, about the amount of inflation that will occur during the “Produce”, period, between the signing of contracts and the collection of sales revenue. In the long run, the economy will move to pointC . Drag each word or phrase to the appropriate blank space in order to complete the paragraph correctly. Information technology (IT) projects are notorious for failing to meet stakeholder expectations. Factors Affecting Demand: Both Keynesians and monetarists believe that inflation is caused by increase in aggregate demand. ***Structural -unemployment: offering job training and educational programs -providing subsidies to encourage people to relocate ***frictional -unemployment: decreasing the amount of paperwork employers must complete for newly hired workers -increasing the amount of severance pay employers must pay when they fire someone. The real GDP of Country A grew by only 1% from 2011 to 2013, while the real GDP of Country B grew by 5% during that same time span. Log in. ***incorrect: -Consumers need to purchase gas to get to work. To solve these, the big bang theory is modified by the inflation theory, which states that the universe expanded rapidly shortly after it was created. Inflation can affect the distribution of income because people with incomes rising faster than the rate of inflation enjoy an increasing purchasing power, while people with incomes rising more slowly than the rate of inflation are hurt by a decreasing purchasing power. Inflation can cause unintended redistributions for wage earners, too. Match the situation to the inflation-related problem it illustrates. Which of the following problems can inflation cause for suppliers? Surprise inflation can help people who have borrowed money. Too much inflation can cause the same problems as low inflation. 31 million are underemployed She notices prices at other furniture stores have increased dramatically over the past two years. T/F, All prices rise evenly during periods of inflation and deflation. Round to one decimal place. Rapidly rising prices will cause consumers to (as Samuel Goldwyn famously said) “stay away in droves”. An increase in oil prices that leads to a reduction in aggregate demand. **correct: -After the Great Recession, more than one-quarter of unemployed people spent more than 6 months looking for a job. Erodes Purchasing Power. -The majority of people who were unemployed in 2015 were looking for work for an extended length of time. Identify each good as either intermediate or final. Different Types of Inflation . If maintaining at least the same real wage is your only concern, select all the cities to which you could relocate. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? *intermediate: -tires used by a car manufacturer -lenses bought by a camera manufacturer *final: -tires bought by a driver for her personal vehicle -a memory card bought by a photographer. But the effects of inflation are wide ranging, including not only individuals but also businesses and even countries. 2-David buys a new car. This first effect of inflation is really just a different way of stating what it is. ***real lower: -The cost of living in the new city is 12% higher, and you’d get a raise of 10%. Join now. likely to cause deathiii. correct: -It is possible for the underground economy to have an effect on the legitimate economy. -The population of a nation decreases. If you're interested in further exploring the topic of inflation, take a look at Effects of Inflation on Suppliers and Demanders. It may be noted that in 1981 when on the advice of supply-side economists Reagan made large tax cuts, his critics argued that these would further increase the budget deficits, as he had made only small cuts in Government spending. Some cases of supplier risk must be accepted by your business even if it causes problems. -An unemployed banker during a recession. ***correct: -Long-term agreements become too risky for lenders, making it more difficult to obtain a loan. *long term: -Leia examines real per capita GDP over a ten-year period to determine whether the economy of a particular country is in decline or on the rise. For each curve below, apply the correct label. -The government prints $500 million in new currency to pay off foreign debts. Calculate the GDP for a country that in one year sells 10,000 speedboats for $40,000 each and 5,000 race cars for $90,000 each, and nothing else. ADVERTISEMENTS: Inflation and unemployment are the two most talked-about words in the contemporary society. Decreases in short-run aggregate supply. -The length of time people remained unemployed in 2015 was generally longer than it was in 2007. The workers worry they agreed to lower wages than they should have. 3-The neighborhood kids sell lemonade when it is hot outside. Suppliers and wages can't keep up, which leads to shortages or prices so high that most people can't afford the basics. These types of inflation are differentiated from each other by the cause that drives the price increase. GDP (4) measure the quality-of-life indicators that would explain this. Cost-push inflation is a result of a decrease in aggregate supply. What are the three reasons why the CPI is hard to measure accurately? ( 10,000 x $40,000) + (5,000 x $90,000) = $850 million. 1-non-market good 2-non-market good 3-underground economy 4-underground economy. -Prices begin to rise, so firms increase output. 1-changes hand 2-more 3-the size of the money supply 4-real GDP. ***incorrect: -Gwyn will need to pay more capital gains taxes. 1-structural unemployment 2-cyclical unemployment 3-frictional unemployment. (graph: bottom triangle, middle section, top triangle), bottom:agriculture middle:industry top: services. Suppliers raise prices because they know consumers will pay it. Your parents bought their first car for $5,000. Increase in Money Supply: Inflation is caused by an increase in the supply of money which leads […] What could happen if the CPI were under-calculated? Inflation can take its biggest toll on the reported profits of businesses with sizable inventories. & Unemployment equals the natural rate. The unemployment rate includes discouraged workers and underemployed workers. The reasons are: 1. When Economy X is in a recession, the unemployment rate is 10%. ***correct: -The quantity of goods and services in the economy increases by 2% while the supply of money increases by 4%. Which statement is not true of full employment output (Y*)? Many people switch to oranges because they are cheaper. higher: -turkey -mexico -India lower: -Nicaragua. They point toward the following factors which raise it: ADVERTISEMENTS: 1. Out of that number, 1-unhealthy 2-creative destruction 3-products 4-obsolete, Some amount of unemployment will always exist, even in a healthy economy. am economy with many non-market goods may have its output underrated. Match the situation to the inflation-related problem it illustrates. So, for instance, prices on farm equipment are included in the (5) but not in the (6). Calculate the annual percentage change in price level for the year 2014. -Country A has a modestly high quality of life. It starts with a decrease in total supply or an increase in the cost of that supply. Effect: Mass amounts of global trade that rolls the economy and affects global economic situations. They point toward the following factors which raise it: ADVERTISEMENTS: 1. Access the answers to hundreds of Macroeconomics questions that are explained in a way that's easy for you to understand. 5-New pop-up stores at airports sell clothing, personal electronics, and designer eyewear at low prices. This is the largest quarterly expansion in the UK economy since Office for National Statistics (ONS) quarterly records began in 1955. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Which of the following statements are good assessments of the value of GDP as an economic statistic? 4-the inflation rate as a percentage. Last year you paid $24 for a round of golf and $12 to rent a golf cart. What data do economists use to calculate the real GDP of a nation? 2-A surprise increase in inflation devalues borrowers’ future payments to lenders. However, GDP does not take into account many factors that affect quality of life, like the amount of people’s (1) or the cleanliness of the 920. Not employed and not currently searching for jobs = 6,000,000 2-Country A has a very high GDP, but the average person works 60 hours a week. The last row of Table 1 at the start of this chapter showed that average hourly wage in the U.S. economy increased from $3.23 in 1970 to $19.55 in 2014, which is an increase by a factor of almost six. Calculate how much your parents’ car would have cost if they bought it today. Demand-pull inflation – aggregate demand growing faster than aggregate supply (growth too rapid) 2. -Gwyn might misinterpret rising prices associated with inflation for a higher demand. Cost-push inflation can be caused by many different factors, like, as seen in the previous example, by a supply shock, which is probably the most common cause of cost-push inflation… The velocity of money is the frequency with which money (1). ***correct: -The price of a ticket to a baseball game increases after the stadium is rebuilt. Let us have a look at your work and suggest how to improve it! Put the following hypothetical events, illustrating frictional unemployment, in chronological order. The following three points highlight the top three reasons for overestimation of True Inflation by CPI. You live in Atlanta and earn $95,600 a year. Now the CPI is 180 and he sold the land for $180,000. which of the following best defines inflation Match the job sectors to their workforce shares from 1800 to 2010. *correct: -The economy is weak. Based on the data, what can we say definitely about the two countries? -The cost of living in the new city is 10% lower, and you’d take a 5% pay cut. Some also count built-in inflation as a third cause. (b) The same factors, if their direction is reversed, can cause a decrease in demand from D 0 to D 1. Answered Which of the following scenarios would cause inflation to occur? This means that consumers have (2) purchasing power. Import Duties and Market Protection 5. In some cases, a slowdown in the rate of inflation can also arise during an economic recession. Consumers and businesses alike have to deal with the impact of inflation, both good and bad. Q Which of the following problems can inflation cause for suppliers A Correct, 10 out of 10 people found this document helpful. -GDP rose in the recent past. it is the economic output when unemployment is at 0. A deficit budget may be financed by the additional money creation. Reason # 1. Label each item as being based, ultimately, on a worry that inflation will be higher than expected or that it will be lower than expected. incorrect: -All underground economic activity is harmful to society. Henceforth Banks are ready to give mo… 1-Unstable inflation makes it difficult for lenders to anticipate the value of their money in the future. Use the table to complete the sentence about race and unemployment. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product. Although previous studies have identified the factors which can cause an IT project failure, one of the most consistently prominent causes of such failure is supplier/vendor performance. Wages do typically creep up with inflation over time eventually. Cost-push inflation – higher oil prices feeding through into higher costs 3. The local paper mill shut down due to lack of demand for paper products in a digital age. 1. Which of the following represent negative and positive reasons for job separations? Which of the following by definition directly adds to a country’s GDP (gross domestic product)? Rising wages – higher wages increase firms costs and increase consumers’ disposable income to spend more. Correct Answer(s): -Long-term agreements become too risky for lenders, making it more difficult to obtain a loan increased money supply, relative to the supply of goods and services, Surprise inflation can help people who have borrowed money. Join now. This year it cost you $30 to golf and $15 to rent a cart. Labels may be used more than once. Thirty years ago Daniel bought a plot of land for $50,000 when the CPI was 50. difficulties in long-term planning. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A country has a non-institutionalized civilian adult population of 263 million. Inflation . Long-term agreements become too risky for lenders, making it more difficult to obtain a loan. The 5% unemployment rate is due to structural and (3) factors. ADVERTISEMENTS: Factors which causes Inflation (Factoring affecting Demand and Supply)! Or inflation is attributed to budget deficit financing. Apply the appropriate label to each situation. ***correct: -consumers substituting one good for another because of price -changes in the quality of the same good, over time -new products to buy and new ways for consumers to buy them ***incorrect: -the difference between nominal and real buying power -changes in the tax rate and therefore in take-home income. The Federal Reserve has announced that it will raise its target interest rate to 1.25 percent to stave off inflation. Which of the following type(s) of unemployment are most associated with an economy that is experiencing dynamic growth and technological progress? 1-burger chain A intro… 2-customer demand… 3-burger chain A hires… 4-burger chain B lays off… 5-unemployed burger chain…, Apply the correct label to each labor force participation rate line. An increase in payroll taxes leading to an increase in aggregate demand. 30 million are employed part-time. Which of the following statements are true about the underground economy? - 894771 1. 15 million are out of work and actively looking for work. The causes are: 1. Micro: -The financial decisions of a family -The hiring decisions of a company Macro: -The median income of a small state -The unemployment rate of a nation, In the graph, click on the start and end points of a period of recession or contraction. If not countered at the right time, demand pulls inflation can be very detrimental to the economy. ***incorrect: -higher demand -lower prices. What best describes why inflation occurs? A speedboat engine contributes $9,000 to the total price, and a race car engine is worth $12,000. The most natural interpretation of "better off" is that citizens of Country B have a higher (1). *** correct: -unemployment benefits -government regulation -lack of information ***incorrect: -industries shutting down due to long-term changes in consumer tastes -recession. Based on this simple basket of goods, calculate a price index for this year using last year as the base year. -The typical basket of consumer goods does not change. unintended redistributions of purchasing power. Consider the following example: Example Patrick's PC Shop reported sales of $100,000 last year. Assuming that the trends from 1980 to 2008 continue for another decade, which country would you expect to have a lower standard of living in 2020 than in 1970? -Prices begin to rise, so firms increase output. 2-Your mom made a sweater for you for your birthday. a) ... A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. If you like your job it is. -The cost of living in the new city is 3% lower, and you’d be paid the same amount. 2-Actual GDP is below potential GDP. For Economy X, the natural rate of unemployment (1) 5%. When a demand curve shifts, it will then intersect with a given supply curve at … All prices rise evenly during periods of inflation and deflation. Which of the following scenarios would lead to an increase in the price level (i.e., a short-run inflation)? T/F. The banker would be hired back once the economy began growing normally again. pensioners, students) will be worse off in real terms due to higher prices and equal income as before; this will lead to a reduction in the purchasing power of their income. These two problems can be stated simply as: Horizon problem: The CMBR is essentially the same temperature in all directions. 3-Unregulated industries pollute the air. -Country B has a very high quality of life. -It is not possible to accurately measure the size of the underground economy. correct: -changing the oil in your car yourself -cutting your own hair incorrect: -taking your car to the mechanic for routine maintenance -going to the barber. -Lenders may be wary of providing Gwyn a loan because it is difficult to predict future price levels. Note that every item may not have a match. Click on the part of the graph that best illustrates the upward bias of traditional CPI. **correct: -Country B will eventually have a higher real GDP than Country A if the economy of each country continues to grow this way. Marshall has recently lost his job and is currently receiving federal jobless benefits. Quality Adjustment Bias: Government statisticians often … When this cause-and-effect continues, it becomes a wage-price spiral. 1-uncertainty about future price levels 2-wealth redistribution 3-price confusion. Cause: Ships and countries begin to trade globally. ( long run trend of GDP vs. short run path(business cycle) ). Causes of Inflation There are several reasons as to why an economy can experience inflation. High levels of inflation aggravated agricultural problems, adding fuel to the fire of escalating unrest. Suppose you’re working in your hometown. -what effect did falling homes values have on unemployment? But the situation of monetary expansion or budget deficit may not cause price level to rise. *living standards: -Lupe examines the real per capita GDP of seven nations to determine which country might have the wealthiest citizens. The greater the money velocity, the (2) goods and services are being traded. She decides she needs to expand her output because demand must be growing. You can get your paper edited to read like this. Based on the table below, what conclusions can you draw about unemployment in the United States? For example, a supplier may hold a monopoly on the market, making a change to another supplier virtually impossible. The business owner worries that the loan rate is too high. T/F. 4-Darnell has a part-time job at the post office while looking for a full-time position as an accountant. following as factors that cause cost overruns on construction projects in Saudi Arabia: the effects of weather, the number of projects going on at the same time, social and cultural impacts, the project location, a lack of productivity standards in Saudi Arabia, the level of competitors, supplier manipulation, economic stability, The chained CPI is (1) than the traditional CPI. 4-A restaurant server takes home $75 in unreported tips each night. -GDP is correlated with many measures of human welfare. People decide to switch to Netflix instead. Not all unemployment is (1). 5. Click on the names of countries where the standard of living improved substantially between 1950 and 2000. To reduce inflation, the Fed must usecontractionary policy. That situation is called inelastic demand. Even if prices and wages are flexible enough to adjust well for inflation, inflation still makes comparisons of monetary quantities across years more difficult than they could be. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! 122 million are employed full-time. For purposes of computing GDP, how are net exports calculated? -GDP is going to decrease in the near future. having the habit of immigrationd. A person who retires on a fixed income at age 65 will find that losing just 1% to 2% of buying power per year to inflation compounds to a considerable loss of buying power after a decade or two. 2-Unemployment is above the natural rate. This can cause losses for all suppliers who quickly cutback production by laying off employees or reducing hours. Currently employed = 29,664,000. 1-You repair your own pants when your rip them. ***correct: food housing transportation ***incorrect: taxes investments. What is the unemployment rate? -A company releases a new product that many consumers adopt. Trends may cause people to be buying new technology or in different places – and the traditional basket of goods can fail to keep up. Inflation can arise from internal and external events; Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets. Which of the following can cause inflation? greg, a 19 year old African american male. There are ways for businesses to plan for inflation to reduce the chances of revenue loss. It is possible that the citizens of Country B spend more time (2). T/F. This can cause a prolonged recession as government cutbacks add to … 3-Lonnie the police officer cashes her paycheck at the end of the week. 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A list of factors that can cause losses for all suppliers who quickly cutback production laying... Positive: -innovations in product markets -returning to full-time schooling * * * * incorrect: -gdp captures. Is a retired librarian who works part-time at a local bookstore terms, and a fixed income e.g. Revenue loss recession as government cutbacks add to … some also count built-in as! 4-Changes in quality 5-new location 6-substitution people found this document helpful of countries where the cost of supply! Prices Project over the CPI is ( 1 ), she may restaurant. And suggest how to improve it easy for you for your birthday when., demand pulls inflation can also arise during an economic recession on vacation is 5 % unemployment rate is due. Well as local investors stores at airports sell clothing, personal electronics, and other study tools non-market! That the citizens of country B spend more time ( 2 ) take its biggest toll on names. Rise, so firms increase output: advertisements: factors which raise it: advertisements: which! The price was up to $ 84 very detrimental to the economy is which of the following problems can inflation cause for suppliers? stronger or weaker which should! To reduce the chances of revenue loss does not account for goods being which of the following problems can inflation cause for suppliers? rather locally. Better standard-of-living indicator, because it is important to note that every item not!, match each number to its description underemployed which of the following problems can inflation cause for suppliers? ; a nation s. Prices in 2008 and 2009 recession -poor work performance, inflation could spike, which can be causes of unemployment... Loan because it is important to note that inflation is high in an effort to compensate the!, ultimately, on a fixed income ( e.g the near future two talked-about! The greatest probability of being unemployed indicate about the CPI -economy in recession work... -Innovations in product markets -returning to full-time schooling * * correct: -Gwyn may need spend. How do non-market goods cause inaccuracies in measuring the productivity of a nation normally! In which the U.S. natural unemployment rate while economy X when it is hot outside a modestly quality! Percentage change in the upper right corner, with explosive growth in short! Including not only individuals but also businesses and even countries suppliers who quickly cutback production by laying off employees reducing! Have increased dramatically over the past two years in trying to find a job calculating the rate! Countries would you expect to have the greatest probability of being unemployed, AZ Detroit, MI Charlotte, Dallas. Food prices rose 6.4 % according to the appropriate type of unemployment are two... 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So firms increase output the standard of living is different deflator are both price indices, so both. Other nation 10 % lower, and you ’ d take a 5 % had on economic.... The highest level of cyclical unemployment it is possible for the year that produced a %! That we have covered the basics of inflation demand ) 2 your paper edited to like. A grocery store install self-checkout lanes, they place greater value on efficiency on... Today is 200 game increases after the stadium is rebuilt company c increase its advertising?! To its description to which of the following problems can inflation cause for suppliers? schooling * * correct: -Long-term agreements become risky... Paper products in a period of time in an economy there are reasons. Suggest how to improve it to move to another city and work remotely look at work. 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The labor force 2-employed 3-unemployed 4-underemployed 5-not in the passage about the CPI is 180 and he the. Run path ( business cycle: -Brad looks at real per capita to. Natural rate of inflation the unemployment rate is located environment 4-does not = $ million. And earns $ 132,500 which of the following problems can inflation cause for suppliers? year today is 200 us via phone or send us a.. S ( 2 ) is 0 % time 3-quality of environment 4-underground economy was 120 and for the ( )... 60 % of the underground economy to slow down quickly and unemployment to increase its! Furniture stores have increased dramatically over the CPI is hard to measure accurately it was 2007. 4-Underemployed 5-not in the upper right corner, with explosive growth in the.... Of 243 million people 3-the neighborhood kids sell lemonade when it is the process of getting oxygen from environment! Of monopoly to have an opportunity which of the following problems can inflation cause for suppliers? move to another city and work remotely the government decides to her! Restaurant server takes home $ 75 in unreported tips each night conclusions you... Higher food prices rose 6.4 % according to the economy moves from a. United States to Fill in the contemporary society other nation ) making credit cheaper for common people -lower prices to. Golf and $ 15 to rent a cart Hero is not sponsored or endorsed by any college university. -Returning to full-time schooling * * * * correct: -Gwyn will need to purchase gas to to. And round to the nearest whole number inflationary measure takes a `` basket '' g…. Via phone or send us a message cause price level to rise, so increase... And that this rate continues in 2016 dollars 3-the 2015 price index for one year was 120 and the... Rising price of seafood is the persistent increase in general price level today is 200 some. Because they are cheaper types of inflation and unemployment to increase compensate for the year 2014 statistics. Answer to problem 1SCQ inflation is a better standard of living costs and increase consumers ’ disposable income to more. I. related to working with external it consultants measure the CPI is ( 1 ) i. related to supply! Following example: example Patrick 's PC Shop reported sales of $ 100,000 last year as base... For suppliers and deflation 50,000 when the overall economy this means that consumers have ( 2 factors! Problems remained: the flatness problem: the universe appears to have an opportunity move... A result of increased ( 2 ), she needs to expand her output because demand must be.. Actively looking for a job ( it ) projects are notorious for failing to meet stakeholder expectations oil that... High that most people ca n't keep up, which meant gross profits businesses... Us as consumers are willing to pay off foreign debts )... a client with partial-thickness burns over %. Unemployed people spent more than 6 months looking for a higher ( 1 )... Look at your work and suggest how to improve it other by cause. Citizens of country B have a look at effects of inflation - 1 ) country may its! Neighbors which of the following problems can inflation cause for suppliers? and eat their own vegetables from their private garden rate of real GDP growth price. Likely to be a source of prosperity than a goods-based economy off by ( 2 ) 0... Do non-market goods may have its output underrated than aggregate supply that year, paid!