Got a tricky question? Receive an answer from students like you! Try us!

Inflation - Research Paper Example

High school
Research Paper
Finance & Accounting
Pages 3 (753 words)
Download 0


Inflation This is a very crucial term when talking about monetary issues. This is so because it is a phenomenon that affects money-related issues every now and then. Before going any further it is of essence to understand first what the term refers to…

Extract of sample

It is of importance to know that the concept of inflation is just not something that came about the other day but in actual sense it has been there for quite some time now and this fact is documented throught the economic history. The common measure of the extent of inflation is the Consumer Price Index which is used to measure the general increase and decrease in the prices of consumer goods and services. Over the years there has been several attempts of trying to come up with ways through which inflation can be measured. In the present day it is quite fascinating to report that indeed inflation can be calculated and accurately predicted. It is also worth noting that there are various ways and formulas that are used to calculate this phenomena. Some of these are documented below. Calculating the inflation rate CPIthis year – CPIlast year I = CPIlast year Calculating The Consumer Price Index (CPI) for the current year CPIthis year = (I x CPIlast year) + CPIlast year Calculating The Consumer Price Index (CPI) for the previous year CPIlast year = CPIthis year (I +1) This formula for calculating interest rate is mostly used by economists. On the other side it can also be used by corporations to compare the revenue they are earning over a given time frame and also for the purpose of calculating the expenses incurred over the same period. ...
Download paper
Not exactly what you need?

Related Essays

Inflation and Real Rates of Return
Real interest rates can be positive as well as negative. A positive real interest rate indicates that the purchasing power of the individual is increasing while a negative interest rate shows that the purchasing power of the individual is decreasing if the individual invests at the nominal rate. From the calculations above, it can be understood that at the current level of inflation, if a person…
6 pages (1506 words)
Impact of Inflation in World Economics
Placing in the most generic term, inflation within an economy diminishes the value of money as a result of which the common people find it difficult to survive. Inflation and growth are such two terms of the economy that are comprehensively incompatible and can never be anticipated to meet (Economy Watch, 2011). The present research paper has been designed to critically evaluate the impact of…
8 pages (2008 words)
Research Paper on Inflation for the Country China
Causes of Higher Inflation in China Evidently, the higher inflation in China can be attributed to numerous factors. According to Yu (2011), the Chinese government’s increased currency control ended up in an artificial decline of foreign exchange rate of the Yuan and this adverse situation in turn amplified manufacturing and export business activities. Macroeconomic theories clearly state that…
4 pages (1004 words)
Explain how inflation targeting operates in the UK and Critically evaluate the benefits of inflation targeting
Inflation is all about price stability and it has been agreed by the economist that a rate of between (0-3) percent is the good enough rate fro the economy. With stable prices at that rate, consumer confidence is raised hence propelling the economy, if the consumer confidence is lower, then the economy will be stuck (Ben 2003). Inflation can only be made success through central banks making price…
8 pages (2008 words)
International Financial Markets: Exchange Rates and Inflation
Thus, understanding of international financial markets is very crucial for any company wishing to invest in the global markets. A thorough research before investing in international markets is critically important for the success of the investment. Feng (2007, 35) points out that global markets around the world have suffered instability and stress due to weakening of the international economy. In…
7 pages (1757 words)
Article Review: Money and Inflation
Most likely firms invest in new technology to increase the productivity of their employees and that of their customers. To ensure that the investment goes through the given firm has to consider the potential return on the investment. This is the measure of performance and the effectiveness of an investment. However money is also know as a store for value, it holds its value over time it is also a…
3 pages (753 words)
Growth rates and inflation rate
On the other hand, growth rates indicate the size of the economy as a result government strategies such as creation of employment, increasing the level of investment, maintaining minimum wage, reducing interest rates and creating competition among other policies. This paper aims at discussing the relationship that exists between the growth rates and the inflation rates. Impacts of inflation…
3 pages (753 words)