0
The government uses a market basket of goods to measure inflation. The market basket of goods is a collection of items that are representative of the overall economy. The items in the market basket are weighted based on their importance in the economy. The weights are updated periodically to ensure that they accurately reflect the current economy.
Still curious? Ask our experts.
Chat with our AI personalities
Beau
Rene
Devin
Add your answer:
Earn +20 pts
When your country is experiencing inflation the government may try to control it by?
Yes government tries to control the inflation by increasing the supply into the market, this balances the demand supply curve
What happens to the open market operations during inflation?
sell more government bonds
The consumer price index attempts to measure changes in?
The price of a select market basket of goods and services.
How does FOMC measure inflation expectations?
One of the tools, among probably many others, is comparing the yields between conventional Treasury securities and TIPS (inflation-protected securities sold by the U.S. Treasury). This can provide a useful measure of the market's expectation of future CPI inflation. Measuring inflation expectations is important because people's expectations about inflation influence their behavior in the marketplace and, in turn, have consequences for future inflation.
What happens when the government increases the money supply?
There several things that happen when the government increases the money supply. This may cause inflation as there will be more money in the market than goods.
