Essays on Inflation and Unemployment Assignment

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The paper "Inflation and Unemployment " is an outstanding example of a business assignment. Inflation is defined as a trend in an increase in prices for a certain period of time. Inflation is determined by considering the Retail Price Index (RPI) which involves comparing prices per month for those goods that are commonly purchased by the customers. The value that is acquired is expressed as an index number of one hundred and then the total per month is compared. The government also uses RPIX to measure inflation, a tool that excludes mortgage interests. Inflation may be classified into three classes depending on the cause of the inflation.

The first one is Demand-pull inflation which occurs as a result of an increase in demands for goods and services that pulls the prices up. This results in an increased demand for wages and consequently the prices of commodities. Cost-push inflation is where the prices of imports rise hence pushing the prices for all other commodities. For example, a rise in the prices of oil may lead to a rise in the prices of many other commodities.

Money supply inflation is explained by the monetary theory as inflation that is caused by an increase in the supply of money. The amount of money in circulation raises leading to a fall in its value (Hudson 1999). Inflation may have both negative and positive effects. To the lenders and borrowers of funds, the borrowers may benefit while the lenders lose. Borrowers may benefit since they will be paying little amount in real terms in times of inflation since the interests rate may below. To the lenders, they will lose because the repayments will be little than expected in real terms.

People demand a rise in wages from the government and the government may, in turn, require a rise in payment of taxes. Those people whose income rates are fixed may also be on the losing end since the prices of commodities rise and their incomes cannot be adjusted. Unemployment id defined as the number of people who are willing and are qualified to work but do not have the job to do.  


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