When inflation ensues, the buying price of a currency entity wears down, meaning, therefore that a person would require more money in order to purchase the same product. A number of economists are of the…
Download file to see previous pages...
The money in supply and inflation rate is always interconnected because a high amount of money in supply usually devalues demand for money. For instance, in a small town if all residents were to get $50 raise in their salary each month, if they were paying about $14 on their gas, then with the rise they will likely not mind paying $15 given the fact that it is relatively less than what they normally spent on gasoline per week. In most cases, this is normally how the relationship between inflation and money often starts, when the market is able to bear high prices due to increase in the money supply (Mishkin, 40). Therefore, most customers will most likely opt out of buying a product at the same price it was before the inflation occurred simply because the buying power of the currency has been worn out.
The graph above shows the estimated value of the relationship between inflation and money growth. The rate of inflation depends on the amount of money in supply. When one takes into consideration the classical theory, money does not affect real variables but has an effect on nominal variables such as inflation. This, therefore, means that when plotting the graph, the rate of inflation will be plotted on the y-axis while the supply of money will be plotted on the x-axis. The blue dots are the actual values while the red line shows the fitted values.
In the long run, the correlation between money and inflation is rather high and can be estimated to almost one. However, when the short term period is taken into consideration, the relationship between money and inflation is rather weak which could be an attributing factor as to why the curve showing the relationship between money and inflation is not straight.
Several economic theories can be applied in order to try to explain the relationship between money supply and inflation. If one were to use the quantity supply theory, also refers to as monetarism, the relation between money in supply and
...Download file to see next pagesRead More
Cite this document
(“Analysis a relationship about economic Statistics Project”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1658156-analysis-a-relationship-about-economic
(Analysis a Relationship about Economic Statistics Project)
“Analysis a Relationship about Economic Statistics Project”, n.d. https://studentshare.org/macro-microeconomics/1658156-analysis-a-relationship-about-economic.
This slowdown reincarnates the long debate about whether and when the Chinese Economy will the largest economy surpassing the US economy. Economists and analysts have been divided on the topic. Economic tools used for prediction have
erica and China have traded together over the years, but the recent imposition of duties on the Chinese rubber tyres threatens to scuttle both the economic and diplomatic ties between the two states (Welch 143). The effects of this protectionism of the local rubber tyre industry
Using data from the Central Intelligence Agency and Excel for data analysis, the report identifies positive effects of labor force and imports and negative effects of foreign direct investments inflow and export on
The basic point of liberals and progressives indistinguishable is to upgrade the monetary prosperity of all men. We all need to see other men better off; better nourished, better housed, better dressed, better educated, healthier and with better
The other concept further states that people’s happiness depend on their countries, hence some countries are happier than others are (Stefan 38).
The research has a hypothesis that the happiness of a country is
This suggests a weak positive linear relationship between sales per square metre and number of full- timers.
Figure 2 shows the scatterplot between sales per square metre and number of part-timers. As shown in figure 2, there
We shall use a secondary set of data, meaning we didn’t participate on any data collection and we cannot authenticate the un-biasness of the data (Jackson, 2011). The sample N = 43, with population proportion samples
The author of the text focuses on the data on GDP per capita for European Union countries. Namely, it is stated, it is investigated to establish reliability between the World Bank and the Central Intelligence Agency (US) as information sources. According to the World Bank, the European Union had a GDP of $ 17.96 trillion and a population of 507.0 million in the year 2013.
In this work, the focus is to employ various aspects of regression and correlation analysis to be able to explore how imports and export ratios affect the GDP of the UAE.The GDP values will take the Y axis (Independent variable) while the other two variants, X1 and X2 will be used as the dependent variables.
3 Pages(750 words)Statistics Project
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Statistics Project on topic Analysis a relationship about economic for FREE!