MacroEconomics in Virginia Beach Essay Example | Topics and Well Written Essays - 750 words

MacroEconomics in Virginia Beach - Essay workoutEconomist and financial analyst determine splashiness by finding the difference between the flow consumer price index and the previous consumers price index (Mankiw, p471). Therefore, this study aims to investigate the impacts and captures of hyper inflation in Virginia area. Impacts of Hyperinflation in Virginia Beach Area The impacts of inflation are numerous whereby, its effects are not and felt by individuals but are also felt by the overall economy. Therefore, hyper-inflation refers to an inflation charge per unit that is above 50 percent, this kind of inflation may be attributed to government actions of printing money in order to finance its expenditure. The act of pritinting money by the national government causes an increase in the add up of money in circulation. This may consequently leads to an increase in commodity prices (Mankiw, p382-387). Hyper inflation was first see in Germany after the First World War when the German government printed money to reconstructs its economy. Additionally, hyper-inflation was first witnessed in Zimbabwe between the year 2004 and 2009 (Smith, paras1-6). In above connection, the United State reported a hyper-inflation after the Federal government tried print money with an aim of suppressing the negative impacts of world war one. However, the U.S government has interpreted measures to mitigate as well as prevent the occurrence of hyper-inflation. Among the measures employed include setting a federal reserve system (Kimberly, paras4-6). In above connection, Virginia anticipated economic and political down gambling as a result of hyper-inflation. Legislators in Virginia were wondering whether the establishment of a common currency crosswise the commonwealth could have acted as a perfect assuagement for currencies supplied by the Federal government (Kimberly, paras3-5).Some of the substitute that were to be utilized as money include Gold and Silver. However, the U nited States Federal government was against the stem because most of their wealth was tied up in foreign debts. On the other hand, the Virginia commonwealth believed that twain political and economic problems were attributed to the impacts of hyper-inflation. The Legislators asserted that the problems of hyper-inflation could have been addressed into two major ways namely motive people to buy legal tender attached on silver and gold (Kimberly, paras5-6). In above connection, citizens could be motivated to carry out capital investment. This could have been done by government by dint of reduction of tax burdens attached on to such investment. Additionally, it was recommended that Virginia could set a side some intangible assets in order to hedge risk associated with hyperinflation (Kimberly, para6). Causes of Inflation There are two major cause of inflation namely learn pull inflation and cost push inflation. Demand pull inflation involves persistent increase prices of commoditie s due to higher demand (Tucker, p284). Several factors may be attributed to be the causes of demand push inflation, among the factors include economic growth, anticipation of inflation in the future, government policies such as monetary policies, advancement in technology. Whereby, economic growth may leads to an increase in demand for goods and services (Kimberly, paras1-3). On the other han