Inflation rate

supplies it the more the economy is grow. Tax policy is a choice the goverment makes as to what taxes to impose, how much to impose or levy , and on whom. It has both microeconomics (effects of individual decisions) and macroeconomic (example: interest rates) aspects. Regulatory policy is using regulations, laws, and other instruments to get better economic outcomes that can help make the life of citizens…

central banks since the gold system was no longer in effect to control prices (Plosser, 2014). “Fiat money […] allowed central banks to expand without any clear constraints, on a permanent basis and with impunity, though at the cost of persistent inflation” (Selgin, 2010, 495). According to Selgin (2010), they did not prevent financial crises, nor did they reduce their severity. He believes that they are not less frequent now than before central banks, and that many of today’s crises can…

with the ability to control inflation. Secondly, they were to provide economic growth and create employment. This seems to insinuate conflict in their mandate because, even when these two goals are in the long run compactible, in the short-term, it was difficult to accomplish. As we have learned, these two responsibilities force central banks to decide of either to raise interest rates or slow or even stop MS growth to stave off inflation or should it decrease interest rates or speed up MS…

The US economy was embroiled in a period of recession. During this period of time, unemployment rates rose significantly. As a result, the real GDP declined. The government had to find a way to combat this problem. The government had to find a way to stimulate aggregate demand. Aggregate demand is the total of expenditures in the economy. This means…

QE and Exchange Rates Since quantitative easing loosens a domestic money supply, it takes more currency to purchase imported goods or services. This makes imports more expensive, and exports cheaper in the same way that devaluation efforts do. According to PPP, this will make the currency depreciate. Therefore, QE affects the exchange rate. Another stated goal of QE, from nations that have implemented it, is attaining proper inflation rates. Inflation rates are part of “market fundamentals”…

Businesses can or have suffered slow customer activities in result of the minimum wage increased and inflation took effect. Sure, some people may have a little extra money that they did not have before, but since the prices of goods increased they may as well uphold the extra money with them instead of spending it, which is the opposite of what raising the…

concept behind and the threat of these is much more serious. Keep the currency stable and reliable is the functions of the national government traditionally. The authorities control the money supply, set interest rate target, in order to promote economic growth and prevent runaway inflation caused market exchange system’s failure. On the basis of the needs of economic to adjusted monetary policy, is a difficult task. Central Banks are hiring hundreds of people to analyze economic data, to find…

borrowing costs to support growth and inflation particularly…

worsen. Stephan & Talavera (2004) analyzed the relationship between optimal debt and macroeconomic volatility and their study revealed that when macroeconomic variability like inflation increases firms reduce the use of optimal level of debt. Gulati & Zantout (1997) and Bas et al., (2009) also reported that inflation rate inversely affects leverage decision of a firm. They…

was usually very little guidance provided as to the future path of interest rates. Last week’s testimony by Fed Chair Yellen constituted, therefore, a departure from normal practice: she indicated a preference for higher interest rates sooner and more gradually vis-à-vis later and more rapidly. This signalled a departure from her earlier line of approach where she favoured a temporary overshooting of the Fed’s 2% inflation target in return for a more rapid return to potential GDP growth. Why the…