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Chapter 19: Q 19. (page 472)

Is inflation likely to be a severe problem for at least some high-income economies in the near future?

Short Answer

Expert verified

No, inflation is unlikely to be a serious problem.

Step by step solution

01

Step 1. Define inflation.

Inflation is defined as a rise in the cost of goods and services in a given economy over time.

02

Step 2. Is inflation likely to be a severe problem?

Inflation is defined as a rise in the cost of goods and services in a given economy over time.

Because most high-income countries have learned to avoid high inflation, this is unlikely to be a significant issue. In order to regulate aggregate demand, inflation can be controlled by increasing the supply of goods and services while reducing money incomes.

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Most popular questions from this chapter

Retrieve inflation data from The World Bank data base (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for 2011–2015. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income. Explain what is surprising or expected about the data.

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

What are some of the other ways of comparing the standard of living in countries around the world?

Is inflation likely to be a problem for at least some low- and middle-income economies in the near future?

Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.
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