Get premium membership and access questions with answers, video lessons as well as revision papers.
Effects of inflation are as listed below:
-Government spends a lot of money on goods and services including raw materials for carrying out their projects.
-Causes redistribution of wealth which usually favors businessmen and debtors as well as affecting the consumers, shopkeepers and fixed earners.
-Affects the wage earners in that a lag between the increased price level and the rise in wages.
-The farmers stand to gain during inflation through their agricultural products.
-The entrepreneurs obtain profits as prices rise at a faster rate than rate of production.
-affects the debtors positively in that they pay less amount of money in real terms of goods and services as they had borrowed.
-It also affects redistribution of income because factors do not rise in the same proportion.
Possible solutions of inflation are;
-Use of policies that control inflation such as fiscal policies.
-Controlling the wage growth in Kenya.
-Encouraging use of monetarism where the government control inflation through controlling money supply.
-Establishing free banking in Kenya.
-Increasing bank and Sacco's interests rates in our country.
-Increasing reserve requirements to the banks by the government thus controlling the amount of money that a given bank ought to keep on hand to cover withdrawals.
franco crick answered the question on February 27, 2018 at 09:16
- Explain the concept of consumer sovereignty(Solved)
Explain the concept of consumer sovereignty
Date posted: February 22, 2018. Answers (1)
- Define the term inefficiency as used in the simple productions possibility model(Solved)
Define the term inefficiency as used in the simple productions possibility model.
Date posted: February 22, 2018. Answers (1)
- State the assumptions necessary to represent production possibilities in a simple production possibilities curve model(Solved)
State the assumptions necessary to represent production possibilities in a simple production possibilities curve model.
Date posted: February 22, 2018. Answers (1)
- State three components of economic efficiency(Solved)
State three components of economic efficiency.
Date posted: February 22, 2018. Answers (1)
- Define the term economic policy as used in microeconomics(Solved)
Define the term economic policy as used in microeconomics.
Date posted: February 22, 2018. Answers (1)
- Explain the difference between microeconomics and macroeconomics(Solved)
Explain the difference between microeconomics and macroeconomics.
Date posted: February 22, 2018. Answers (1)
- State and explain the types of isoquants in microeconomics(Solved)
State and explain the types of isoquants in microeconomics
Date posted: February 22, 2018. Answers (1)
- What is an isocost line?(Solved)
What is an isocost line?
Date posted: February 22, 2018. Answers (1)
- Why is an isoquant negatively inclined?(Solved)
Why is an isoquant negatively inclined?
Date posted: February 22, 2018. Answers (1)
- What does the slope of an isoquant represent?(Solved)
What does the slope of an isoquant represent?
Date posted: February 22, 2018. Answers (1)
- State five assumptions of isoquants(Solved)
State five assumptions of isoquants.
Date posted: February 22, 2018. Answers (1)
- What is the difference between an isoquant and an indifference curve?(Solved)
What is the difference between an isoquant and an indifference curve?
Date posted: February 22, 2018. Answers (1)
- State the similarities of isoquants and indifference curves(Solved)
State the similarities of isoquants and indifference curves
Date posted: February 22, 2018. Answers (1)
- Give measures an entrepreneur would take to gain a competitive edge over other competitors(Solved)
Give measures an entrepreneur would take to gain a competitive edge over other competitors.
Date posted: February 21, 2018. Answers (1)
- Under indifference curve analysis, a consumer is considered to be at equilibrium when certain conditions are met, state these conditions(Solved)
Under indifference curve analysis, a consumer is considered to be at equilibrium when certain conditions are met, state these conditions.
Date posted: February 21, 2018. Answers (1)
- Define properties of indifference curves in economics(Solved)
Define properties of indifference curves in economics
Date posted: February 21, 2018. Answers (1)
- Outline two schools of accessing consumer utility(Solved)
Outline two schools of accessing consumer utility.
Date posted: February 21, 2018. Answers (1)
- State three types of goods which disobey the law of demand(Solved)
State three types of goods which disobey the law of demand.
Date posted: February 20, 2018. Answers (1)
- Distinguish between the following terms: demand curve and demand schedule, ordinal utility theory and cardinal utility theory, consumer surplus and producer surplus, arc elasticity and point elasticity(Solved)
Distinguish between the following terms:
demand curve and demand schedule
ordinal utility theory and cardinal utility theory
consumer surplus and producer surplus
arc elasticity and point elasticity
Date posted: February 20, 2018. Answers (1)
- Define (a) consumer equilibrium (b) market equilibrium(Solved)
Define (a) consumer equilibrium (b) market equilibrium
Date posted: February 20, 2018. Answers (1)