October 7th - Inflation

October 7th - Inflation - Agro Demand based not simply on...

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Inflation Worldwide problem, most of the world has experienced inflation a lot worse than the USA. During periods of inflation price no longer matter. Our inflation is generally under 7%, 3% expected, 5% average, and 7% start getting worried. Inflation is the increase average level of prices. Consumer Price Index (CPI) , PPI, and GDP Price Deflator CPI – market basket that the average family consumes in a given year CPI – Market _________________ Housing Rents X weight (.33) Snickers Bars X weight(.00000000001) 3 Graphs: Person A Demand, Market Demand and Agro Demand.
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Unformatted text preview: Agro Demand based not simply on price and demand the graph factors in all of the demand and the price is all money avaliable for use. This is GDP = P x Q is the real economy. Where does inflation come from? Can come from the demand side of the economy October 7 th – Real Economy Picture. 1. Borrowing money because you refuse to raise the taxes 2. Another place that it comes from is supply side of the economy with the increase in price for imports. 3....
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This note was uploaded on 09/09/2011 for the course ECONOMICS 104 taught by Professor Crocker during the Fall '08 term at UMass (Amherst).

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