MGEA06H3 Lecture Notes - Labour Force Survey, Underemployment, National Research Universal Reactor
30 Jan 2013
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MGEA06H3 Full Course Notes
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If we multiply 1. 9% by 20 years, we got 38% without compounding; prices would have only risen by 38% not 44. 8%. There is a simple rule known as the rule of 72. # of years needed for a number to double = 72 / x % 72 / 1. 9 = 37. 9 which means it take 37. 9 years for prices to double. Inflation rate was relatively low and stable in recent years (due to the 2% inflation target set by the bank of canada, and the inflation target has been extended to 2016). In the 1970s and early 80s, canada experienced high inflation and it caused problem. It reduces the purchasing power of money, the amount of goods and services that can be purchased with a unit of money (ie: if a hamburger costs 39 cents in 1967 you can buy 13 hamburgers with . The same will only be able to buy 3.
