Difference between anticipated and unanticipated inflation, Microeconomics

Assignment Help:

Explain inflation, and the difference between anticipated and unanticipated inflation.        

Answer  

Inflation is the persistent rise in the general price level in the economy.      

Anticipated inflation-

1) If the rate of inflation is anticipated then people take steps to make suitable adjustments in their contracts to avoid the adverse effects which inflation could bring to them

2)  Its effects are less substantial and less harmful

3)  Effects of anticipated inflation are avoidable.

Unanticipated inflation

1)  If the rate of inflation is unanticipated then people cannot make necessary adjustments in their contracts as they do not know what will be the rise in price level.

2)  Its effects are more substantial and more harmful

3)  Effects of unanticipated inflation are unavoidable.

 


Related Discussions:- Difference between anticipated and unanticipated inflation

Policies of educational financing - earmarking, Policies of Educational Fin...

Policies of Educational Financing - Earmarking Earmarking refers to setting aside and using the funds generated by a special cess/tax for the particular purpose for which it i

Determinants of private demand - non-monetary benefits, Determinants of Pri...

Determinants of Private Demand - Non-Monetary Benefits Social status associated with university degrees is a determinant of investment decisions in higher education in the cas

Price mechanism, use of diagram how the price mechanism operates to allocat...

use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.

Economic Growth, the prevention of major swings in economic activity cn be ...

the prevention of major swings in economic activity cn be handled most easily by the financial or government sector?

Find the marginal revenue, (i) When the demand function is 2Q - 24 + 3P = 0...

(i) When the demand function is 2Q - 24 + 3P = 0, find the marginal revenue when Q=3. (ii) Given the demand function 0.1Q - 10 +0.2P + 0.02P2 =0, calculate the price elasticity of

Income and substitution effects, Income and Substitution Effects A fall...

Income and Substitution Effects A fall in price of a good has the two effects: Substitution & Income -Substitution Effect Consumers will tend to buy more of the good

What is an optimization in the methods of mathematics, What is an optimizat...

What is an optimization in the methods of mathematics of modern economics? Optimization is a basic tool for the development of modern microeconomics analysis. Many of economic

Short notes, Amartya Sen''s concept of poverty and welfare.

Amartya Sen''s concept of poverty and welfare.

#proposed merger between heinz and beech-nut scrutinized, Who are the compe...

Who are the competitors in the jarred baby food market? What market share do they have? How do Heinz and Beech-Nut compete with one another? Are the barriers to entry high or low f

Central economic problems, discuss the central economic problem facing surv...

discuss the central economic problem facing survivor group

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd