strawberry
Member
- Joined
- May 18, 2003
- Messages
- 189
how does high inflation cause low levels of unemployment??
how does high inflation constrain economic growth??
how does high inflation constrain economic growth??
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inflation (1 Viewer)
- Thread starter strawberry
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Newbie
is a roflcopter
- Joined
- May 17, 2003
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- HSC
- 2003
eco growth is measured by real gdp
so high inflation = less real gdp = less purchasing power = lower eco growth
inflation/unemployment tradeoff only happens in short term
inflation can be a side effect of expansionary macro which makes jobs
so high inflation = less real gdp = less purchasing power = lower eco growth
inflation/unemployment tradeoff only happens in short term
inflation can be a side effect of expansionary macro which makes jobs
Two key points missing there newbie.
High inflation does not lower economic growth in that way at all. It is not merely a calculation as you seemed to have termed it. Higher inflation means that firms are less willing to borrow funds to invest preventing growth in that sense and also within Australia if inflation is too high (>3%) then RBA will raise interest rates, lowering economic growth.
High inflation does not lower economic growth in that way at all. It is not merely a calculation as you seemed to have termed it. Higher inflation means that firms are less willing to borrow funds to invest preventing growth in that sense and also within Australia if inflation is too high (>3%) then RBA will raise interest rates, lowering economic growth.
malayz_angel
Member
Lol...I had one due Monday too!