Economics

What Inflation Rate To Use For Financial Planning?

When budgeting for retirement, financial gurus recommend considering a 3% yearly inflation rate. That is, in fact, a greater rate than the government has calculated in recent years. The Bureau of Labor Statistics calculates the current Consumer Price Index (CPI) by tracking monthly average prices of consumer goods. The CPI is defined as “a measure […]

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What Is The Long Term Cause Of Inflation?

Inflation is defined as a steady rise in the price level. Excess aggregate demand (AD) (excessive economic growth) or cost-push forces are the two main sources of inflation (supply-side factors). Summary of the main causes of inflation Demand-pull inflation occurs when aggregate demand outpaces aggregate supply (growth too rapid) Cost-push inflation, for example, occurs when […]

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