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Economics Tuition: Explain why government tries to maintain price stability to maintain or enhance its level of investments

First, a high level of inflation introduces business uncertainty and hence reduces investors’ incentive to invest. Specifically, hyperinflation disrupts the...

Economics Tuition: Explain why inflation exists in the housing market?

Given that housing is an asset to home-owners, the rise of the price of assets will cause the individuals to raise the price of their factor services as they...

Economics Tuition: How to Explain Cost-Push Inflation?

Cost-push inflation occurs when there is a rise in cost of production which will lead a fall in the aggregate supply that will lead to an excess demand...

Inflation

Understanding Inflation


Inflation, in a broad sense is the rate at which the prices of goods and services increase in a market. It is a good indicator to assess the health of an economy. It is key for students to understand the factors that give rise to inflation together with the various terms and effects it brings about to an economy. The illustration of inflation in graphical terms is also important in order for students to do well.

Economics Tuition: How to Explain Cost-Push Inflation?

Cost-push inflation occurs when there is a rise in cost of production which will lead a fall in the aggregate supply that will lead to an excess demand condition, contributing to increase in price level. When the cycle becomes cyclical, it will develop as wage-price...

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