Mba Project
NAME OF STUDENT ANSHUL MANGAL
DRIVE FALL 2014
PROGRAM MBA/ MBADS/ MBAFLEX/ MBAHCSN3/ PGDBAN2
SEMESTER 1
SUBJECT CODE & NAME MB0042- MANAGERIAL ECONOMICS
BK ID B1625
CREDIT & MARKS 4 Credits, 60 marks
Ques. 1. Inflation is a global Phenomenon which is associated with high price causes decline in the value for money. It exists when the amount of money in the country is in excess of the physical volume of goods and services. Explain the reasons for this monetary phenomenon.
Answer. INFLATION:- The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time.
Inflation affects an economy in various ways, both positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring that central banks can adjust real interest rates (to mitigate recessions),[5] and encouraging investment in non-monetary capital projects.
CAUSES OF INFLATION:-
1. Cost-push inflation occurs when businesses respond to rising production costs, by raising prices in order to maintain their profit margins. Higher costs shift a firms supply curve upwards and lead to an
DRIVE FALL 2014
PROGRAM MBA/ MBADS/ MBAFLEX/ MBAHCSN3/ PGDBAN2
SEMESTER 1
SUBJECT CODE & NAME MB0042- MANAGERIAL ECONOMICS
BK ID B1625
CREDIT & MARKS 4 Credits, 60 marks
Ques. 1. Inflation is a global Phenomenon which is associated with high price causes decline in the value for money. It exists when the amount of money in the country is in excess of the physical volume of goods and services. Explain the reasons for this monetary phenomenon.
Answer. INFLATION:- The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time.
Inflation affects an economy in various ways, both positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring that central banks can adjust real interest rates (to mitigate recessions),[5] and encouraging investment in non-monetary capital projects.
CAUSES OF INFLATION:-
1. Cost-push inflation occurs when businesses respond to rising production costs, by raising prices in order to maintain their profit margins. Higher costs shift a firms supply curve upwards and lead to an