Macroeconomics Term Paper Example | Topics and Well Written Essays - 1750 words - 1

Macro economics - Term Paper ExampleThis has resulted in a reduce in production, and hence, the worlds Gross Domestic Product (GDP). Other problems such as the dash of the housing market havent helped much, and have made the task of lawmakers even more toilsome and thought provoking. All of these problems, along with numerous others have been a result of increasing prices of products, services, and in short, the live of living. This cast up in prices of these countless things is known in economic terminology as inflation.Hyper puffiness Hyper inflation causes severe changes and imbalances in demand and supply. This type of inflation is short-lived because the government intervenes to help bullion perform its operations. For instance, Russia experienced hyper inflation when it was broken down. During this type of inflation, income levels batchnot keep up with the cost of living and the buy power freefalls. This leads to economic recession.Moderate or creeping inflation In this type of inflation, prices rise moderately. The upward trend in prices is gradual and averages between two to five percent. This type of inflation is good for the preservation, as it is considered a sign of demand in the economy. Creeping inflation gives several inter linked benefits to an economy because firms will produce more in response to higher demand, employment would increase and the workers would earn more. Thereby, the increase in the cost of living would be proportional to the increase in income level. However, creeping inflation can turn into hyper inflation, if the price level increase crosses double figures.Strato Inflation Inflation rate of this type ranges from 10% to several hundred percent. It is difficult to anticipate and is usually experienced by developing economies due to their economic weakness.Disinflation Slowing down of the rate of inflation is called disinflation. For example, if the rate of inflation in USA in 2006 was 5% and in 2005 was 7%. Prices inc reased in both the