ECON 0110 Study Guide - Midterm Guide: Mexican Federal Highway 1, United States Treasury Security, Bachelor Of Business Administration
Document Summary
Other workers seek similar increases: ss benefits rise too fast. New goods: price \/ when more widely produced (less valuable essentially. ) Inflation types / causes: demand pull inflation (1960"s) Occurs when economy is near full employment. Caused by increased spending by 4 sectors: cost push inflation (1970"s) Caused by increase in production costs: ^ fuel costs, ^ int. Rates: ^ wage rates (near full employment, input shortages (strikes, stricter env. Regs: stricter safety regs, ^ costs of fringe benefits (health insurance or retirement, ^ s. s. & medicare taxes. Consumption function {c(y)} (simplified to be straight line (y-axis = household consumption, x-axis = income (y): spend it (c) What people generally do with extra money : save it (s) Y0 = disposable income: pay taxes (t) Y0 = y t = c + s. Wealth, expected future income, expected inflation rates, level of interest rates. Wealth = value of assets liabilities (debts)
