What are the similarities and differences between growth and inflation (in term of economics)?
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Similarities\n1. Prices will be high.\n2. Money Floatation will be high\n\nDifferences\n\n1. In Growth, production level and quality of goods also will increase, but in inflation production level and quality of goods remain the same but price will increase..\n\n2. Standard of living will increase in growth, it will be low at inflation periods..
775445
The growth of an economy can come from two sources.  Government investment or entrepreneur investment.  Although government investment can facilitate economic growth as in building new roads and water supply systems many times government development money is not put to the best economic use because that development money is dictated not by best use but by political and self interest considerations. \n\nEntrepreneur investment on the other hand tends to be much more efficient in promoting economic development because the main consideration in that investment is only return on investment.  The investment tends to gravitate toward where it can make the highest return and thus generate the highest economic benefit to the economy.  \n\nThat is why free market economies tend to outperform planned economies in general, because the free market tends to know better where the highest economic returns are located whereas the planners tend to funnel investments for their own personal interests.
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% change in quantity that consumer is willing to buy, divided by % change in income (assuming that the price of good is held constant). \n\nTells you how much impact do changes in income have on the demand. If less than 1, it is called inelastic, and there is little change in demand; is larger that 1, - elastic and high changes.
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Both parties will tell you that the economy is sound. Bush says inflation is under control. How can this be true? Everything that I buy is from and Atheist / Communist China. Low quality Junk. Yet it cost more than before. Gas prices are up . Groceries and efreight has gone through the roof. I don.t trust any politician or media anymore.
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Technically, money supply is not inflation - but it is empirically associated with inflation.  \n\nInflation is typically taken from a consumer price index from a fixed basket of goods and services. While UK M1 rose 14.5% on broad measures for September 2006 (but only 5.1% on narrower measures), consumer prices rose 2.4% in October '06 (vs. 2.3% last year).  \n\n\n\nYou are right to point out that the market is awash in liquidity. Money comes from numerous sources - at its basic core bills, coins, checking and savings.  But the broader money supply (which is the one that matters) includes many other supplies - like the capital markets. \n\nWhere is all this cash coming from?  \n\nFirst and foremost, it is coming from loose monetary policy, residual from low interst rate environment post-9/11.  As interest rates went to 40-year lows in the US, Japan and Europe, borrowing costs got so cheap as to be extremely cheap.  This trigger asset reflation in real estate and commodities. Indirectly, it also help spur corporate earnings growth (double digit in the US, whereupon 7% is more like the average growth).  The asset reflation also gave consumer a base to start borrowing from, dipping into equity saved up in their houses. \n\nSecondly, the typical brake on liquidity - government bonds - has not been working.  Typically, centralized banks and treasuries issues more paper in order to soak up excess liquidity in the system.  For example, the US had to issue lots of new debt in 2005 to cover the costs of post-9/11 security and the two wars.  However, large trade imbalances have lead Asian and Gulf countries to purchase large amounts of these issues to 1) stabilize interest rates in countries with fixed or quasi-fixed currency regimes (e.g. China) or keep interest rates stable in those markets with floating currencies.   \n\nSo money supply has surged but without the surge in wages (revenue-side inflation) or prices (cost-side inflation).  How?  Basically, we are seeing a tsunami of capital formation - not at the consumer level - but at the corporate, government and asset level.  We are already seeing the side-effects of this capital formation through the emergence of private-equities, rise of hedge funds and record pace of corporate earnings. \n\nWhile we b*tch and moan about inflation at 3-4%, clearly we have short memories.  Woe were the days back in the 80s when itnerest rates were in the twenties or the seventies when we had to wait in line for gasoline and prices went up so fast that they didn't bother posting the price.  \n\nEverything is relative.  It hurts pretty bad going from a very long period of almost no inflation to "normal" inflation.\n\nBy the way... the US still publishes its M1 and M2, but discontinued M3.
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Sounds very complicated.  Probably an assumption that your costs and incomes will need to adjust for inflation and you need to determine what new prices you have to demand in order to maintain a profit.  The assumption, of course, would be how much inflation you could expect.  Feh.  Good luck on that.  Anyhow, sounds like a college homework problem...  Good luck on exams!
208823
Gross Domestic Product refers to the price of all goods and services produced in the country.  Nominal GDP is expressed in dollars.  Real GDP is an adjusted figure, taking into account inflation.
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below is the link u can check to ur answer:\nhttp://www.mofa.go.jp/policy/economy/asem/aeyls/1997/w5_f.html\nhttp://www.access.gpo.gov/congress/house/science/cp105-b/prsecrol.html\n\nhttp://www.unescap.org/pdd/publications/apdj_12_2/lal.pdf\n\nCASE STUDY:\nhttp://siteresources.worldbank.org/INTALBANIA/Resources/Private_Sector_Development_for_Economic_Growth.pdf
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when oil prices go up, It costs more to make & deliver goods. In turn the price of goods go up. Hence inflaton.
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Inflation is classically caused by rising interest rates.  When money is harder to borrow (higher rates), harder to come by, then goods and services end up rising in value in response.  Because people need to borrow (from credit and ARMS and whatnot), they are forced to charge more for whatever they are selling or performing.  So they begin to raise their prices, and everyone else needs to do likewise.  The best way to stop inflation, generally, is to lower the interest rate.
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Rising prices of fuel increases inflation because almost all man made fibers, plastics etc. are created using oil.  Therefore the cost of raw materials goes up.  \n\nThe factory that produces the finished product has to use energy to produce their goods whatever they may be.\n\nThese goods then have to be shipped to market using transportation that requirs fuel.  \n\nAll this leads to a spiral of inflated cost throughout the supply chain which causes an increase in inflation throughout the global economy.
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These two links are quite comprehensive in their coverage of these terms. \n\nhttp://en.wikipedia.org/wiki/Inflation\nhttp://en.wikipedia.org/wiki/Deflation_%28economics%29
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macroeconomics and microeconomics\n\nmacro-the study of economics as a whole.\n\nmicro-the study of the individual households.
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In most econ equations productivity is represented by the variable "A" and it is the only real way to grow an economy quickly. Productivity usually comes from technological advances like PCs. Basically, productivity increases when the same number of people can do more work or increase GDP per capita.
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The two main branches of economics are microeconomics and macroeconomics. Microeconomics looks at the behavior of what are called 'individual actors' (an individual, a household, a business or even groups of those). Microeconomics looks at prices of things and of services. It wants to help people decide how to divide society's resources.
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GDP is a measure of the size of its economy.\nTo find GDP,\nGDP = consumption + investment + government spending + (exports − imports) \n\nthis is a mathematical relation.don't know whether increase in gdp will attract more investment
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The production of capital goods will cause the PPC to shift outwards leading to (potential) economic growth. The opportunity cost of growth is current consumption. Production of consumer goods provides current gratification but does nothing to stimulate economic growth or the outward movement of the PPC.