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Inflation Costs
shoeleather costsmenu costs
price variabilitytax liabilities
confusion and inconvenienceredistribution of wealth
Price Variability
distorts relative values between things.
market cannot allocate as well
distorts decisions
Tax Bracket Creepinflation makes nominal income
increase.
bump into a higher tax bracket
pay more tax with more real income
Quantity Theory of Money
MV = PYAssume V is constant
then an increase in M will only increase P or Y
Quantity Theory of Money
1. V is constant2. Change M will change P x Y3. Y is a function of capacity4. If M is increased then P is increased5. Therefore increasing M will increase inflation
Inflation Tax
When government prints too much money is
becomes less valuable.Anyone who has money
has lost value
Key Termsclosed economyopen economyexportsimportsnet exportstrade balancetrade surplustrade deficitbalanced trade
net capital outflownominal exchange rateappreciationdepreciationreal exchange ratepurchasing power parity
ARM HoldingsWolfson Marvel
SkyworksCSR
Linear TechnologiesNXP
National SemiconductorSharp
SamsungToshibaInfineon
BroadcomNumonyx
MicronDialog Semiconductor
Texas InstrumentsSTMicroelectronics
Silicon StorageRF Microdevices
Cirrus Logic
U.S.U.K.
GermanyKoreaJapan
TaiwanChina
Saudi Arabia
450,000 iPhones and cost about $242,000 to charter, with fuel accounting for more than half the expense. 54 cents or around 2 riyals
44,700 gallons or 170,000 liters
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