Question
Can you please help me how to draw AD and AS of Japan with short-run and long-run, with the information that i got: Inflation :
Can you please help me how to draw AD and AS of Japan with short-run and long-run, with the information that i got:
Inflation: an increase in the cost of living as the price of goods and services rise and the purchasing power of currency is falling. It is measure in a period of time.
Rate of inflation:The annual percentage rate of change in the price level, as measured, for example, by the CPI.
-Inflation rate =CPI2-CPI1x100 / CPI1
-CPI2- CPI second period
-CPI1- CPI previous period (12months)
*CPI- consumer price index.
Real Interest rate:The real interest rate is a measure of the real return received by people who lend money and the real cost faced by those who borrow money. It is calculated by subtracting the inflation rate from the nominal interest rate. The rationale for this calculation is that we expect the inflation rate to be factored into the nominal rate of interest as lenders seek to preserve the real value of the money that they lend.
Bank rates:is the interest rate at which a nation's central banklends money to commercial banks, often in the form of very short-term loans. Managing the bank rate is a method by which central banks affect economic activity.
Inflation:
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