What Shifts LRAS To The Right? The long run aggregate supply curve (LRAS) is determined by all factors of production – size of the workforce, size of capital stock, levels of education and labour productivity. If there was an increase in investment or growth in the size of the labour force this would shift the
What Is The Definition Of Stagflation? Stagflation is characterized by slow economic growth and relatively high unemployment—or economic stagnation—which is at the same time accompanied by rising prices (i.e. inflation). Stagflation can be alternatively defined as a period of inflation combined with a decline in the gross domestic product (GDP). What is the best definition
Which Of The Following Describes A Developing Nation? The answer is A. A command economy with a low Human Development Index. A developing country, also called a less developed country or an underdeveloped country, is a nation or a sovereign state with a less developed industrial base and a low Human Development Index (HDI) relative
How Did Stagflation Affect The Economy? The term “stagflation” was coined in the 1970s, when the United States began experiencing inflation during a recession. … The combination of all these economic and regulatory factors led to double-digit inflation rates in 1973 and 1974, and nearly doubled the unemployment rate. Naturally, consumer spending plummeted. How does
What Tool Measures Inflation? The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households. What tool is used to measure inflation? As an economic indicator. The CPI is the most widely used measure of inflation
What Led To Inflation During The Revolution? Money creation as a means of war finance When the United States went to war against major powers it resorted to the printing press to help finance the war. In every case the result was a substantial inflation. What caused inflation after the American Revolution? Because it did
Which Of The Following Factors Will Most Likely Cause An Increase In Aggregate Demand? Which one of the following factors will most likely cause an increase in aggregate demand? An increase in net exports. Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. Which of the following
Who Are Hurt By Unanticipated Inflation? Lenders are hurt by unanticipated inflation because the money they get paid back has less purchasing power than the money they loaned out. Borrowers benefit from unanticipated inflation because the money they pay back is worth less than the money they borrowed. Who loses from unanticipated inflation? Creditors are
What Is Fisher Effect Explain The International Fisher Effect? What Is the International Fisher Effect? The International Fisher Effect (IFE) is an economic theory stating that the expected disparity between the exchange rate of two currencies is approximately equal to the difference between their countries’ nominal interest rates. What does the Fisher Effect tell us?
Who Is Generally Hurt By Inflation? Very rapid or extreme inflation (rising prices). Who is generally hurt by inflation? Creditors, savers, consumers, and those living on fixed incomes. You just studied 2 terms! Who is hurt by inflation the most? Inflation means the value of money will fall and purchase relatively fewer goods than previously.