dal all of your vids are brilliant but this is the one that saved my life!! i watched it literally the day before my IB paper 1 exam and a question about inflation came up. if i hadn't seen this video i would've had no idea how to do it. results came out a few days ago and i got a 7 in economics!!! i owe it all to you man! i won't be doing any more econ for the rest of my life but i hope you keep your quality videos up :))))
the menu cost isn't something i came across so far, this is a beautiful piece to use for your evaluation to make your answer seem well thought through.
Could you also say that as a cost; the fact that the inflation increase and prices go up means less can be bought with your savings and so that's a cost?
Quick question: Do you think deflation will actually increase consumption or decrease consumption? On one hand, consumers will wait to purchase later but then if they have been importing forever and that good is cheaper domestically, they will purchase it domestically and this will increase consumption. Or am I wrong?
7 years late but I’d argue it depends on the product itself. If it is price inelastic as it is a necessity then it is, of course, unlikely for consumption to change
Thanks of these videos they are really helping me in my A level economics course. Could to recommend any books that would be helpful to read, specially ones that can help with revision?
Well, indeed this was extremely helpful, however, IB econ is in 4 and 5 days.... some 15-20mins recap videos would be awesome, or some tips for the exam or something :/
Surely you'll always be better off getting a raise as you only pay tax on the money in that band? So if the tax bands began at £10,000 at 10%, then surely even if you got a pay rise of 1% from £9,950 to £10,049.50 then you'd be better off as you're only taxed on that £49.50?
Since inflation affects different people differently, some beneficially and some adversely, does this not make any government-directed or government-sanctioned inflation a political issue rather than an economic issue?
Can fiscal drag work? Income works in tax bands. For example, 11000 being adjusted to inflation means 3% (inflation rate) is added..so that's £330 ontop of your income. If that pushes you onto a tax band of 90% you're still making money because 90% is only taxed on that £330, Not the entire 11000.. The only way it can work out is it if the taxation rate is more then 100%, then you lose out.
The difference is that the £11000 you earned is the equivalent value of £10670 the year before following 3% inflation. Say there was a 10700 tax band at which point all income past this point was taxed at 20% - you would keep 80% of the increased wage that exceeded 10700. £300*0.80 = £240 but before your £10670 in real terms was being taxed at a lower tax band (say 10%) and therefore you kept more of your income in real (not nominal) terms. 10670 taxed at 10% leaves you £9603 11000 taxed at 10% up to 1700 and then 20% on all income exceeding this leaves ((10700 * 0.90) + (300 * 0.80)) = £9870 9603 adjusted for inflation (3%) is 9891, not 9870. Therefore your income has fallen in real terms.
Workers think inflations gonna happen, so they go to their bosses and say I want my real wage to stay the same, to do this the nominal wage has to go up to adjust for the predicted inflation. If businesses now have to pay their workers more across the whole economy every businesses costs of production go up. If you shift SRAS inwards you will see that the price level increases. This means that the act of people speculating inflation made it a reality. It’s a self fulfilling prophecy. This is cost push By the same token if consumers think that in the future inflation will happen this will cause their purchasing power (how far their money will go) to decrease. If you think you will have less money in the long run you will buy in the short run to maximise utility. Excessive consumption shifts AD, this causes demand pull inflation.
High inflation can suggest that changes in bank rates may be necessary and that a recession could occur, i.e. altering the interest rates (as we have seen this year). In turn, these deflation strategies can slow economic growth and rise the cost of living via more expensive mortgages and loans. Therefore, customer confidence and spending in the economy could decrease, leading to a negative multiplier effect that further pronounces these economic contractions as people spend less and save more (a cash leakage in the circular flow of income).
***** Are you sure about inflation leading to reduced international competitiveness? Inflation leads to a depreciation of the domestic currency which makes domestic goods relatively cheaper on the international market.
Will Kinsella That effect (if it happens) will come later. The depreciation you have mentioned comes as a result of inflation eroding competitiveness and therefore there being a lack of demand for exports. The lost of int. competitiveness comes first, it is a killer for countries when it happens
dal all of your vids are brilliant but this is the one that saved my life!! i watched it literally the day before my IB paper 1 exam and a question about inflation came up. if i hadn't seen this video i would've had no idea how to do it. results came out a few days ago and i got a 7 in economics!!! i owe it all to you man! i won't be doing any more econ for the rest of my life but i hope you keep your quality videos up :))))
These videos have honestly saved my life for A2 economics. Thank you so much!
I should have known about this channel a long time back now I am 4 days away from my economics paper...this is really efficient
my man just did my 30 marker essay
it's a 25 mark lol #getitright
@@whatabadman6522 its 30 marker for edexcel #shutyourmouth
@@AfricanGotPace lmao
@@AfricanGotPace lol
@@whatabadman6522 Maybe them man do another exam board.
the menu cost isn't something i came across so far, this is a beautiful piece to use for your evaluation to make your answer seem well thought through.
Damn, so this is what you looked like before the infamous 'Dal-Fade'
laurence ainsworth day before the exam binge squad
@Vihaan Kamdyn wtf why would you even want to hack someone’s instagram? Seems like a lot of effort for little benefit.....
@@EternalShadow1667 It's a spambot.
Got my second AS mock @ 9 THANK YOU SO MUCH THESE VIDEOS HAVE SAVED MY GRADES AND HELPED ME SO MUCH
In-depth lecture on inflation, excellent economics resource!
I rely so much on your videos. Could you please cover International trade as well. Thank you.
Could you also say that as a cost; the fact that the inflation increase and prices go up means less can be bought with your savings and so that's a cost?
@@eternalpresidentkimil-sung9841 yes, inflation reduces purchasing power of money which is considered a drawback
Thanks for a very helpful video! Can you make more vids on evaluation techniques for as macro pls?
"it can make them feel happy" =,)
next 2 years should be easy now, thanks
How was those 2 years?
@@JK-vm7yo Ended up being 1 year since I dropped econ at AS but got an A!
Thank you for these -very useful!
So helpful!! feel prepared for my first internal AS macro test tomorrow!! Thanks
Thank you so much sir! You saved my as macro paper2!!
Videos are very useful!
Can you do a video on how to score analysis and evaluation marks in general please?
Quick question: Do you think deflation will actually increase consumption or decrease consumption? On one hand, consumers will wait to purchase later but then if they have been importing forever and that good is cheaper domestically, they will purchase it domestically and this will increase consumption. Or am I wrong?
7 years late but I’d argue it depends on the product itself. If it is price inelastic as it is a necessity then it is, of course, unlikely for consumption to change
Thanks of these videos they are really helping me in my A level economics course.
Could to recommend any books that would be helpful to read, specially ones that can help with revision?
That was really helpful, Thank you
Glad I found this channel!
this man is amazing
Cheers!
Vry helpful
Love you sir
Well, indeed this was extremely helpful, however, IB econ is in 4 and 5 days....
some 15-20mins recap videos would be awesome, or some tips for the exam or something :/
5:52 This makes me think that the fed is on China's side since it promotes the fact that we import so much from China. I subbed btw ty
How is it reduced international competitiveness??? Shouldn’t be reduced National competitiveness instead?
It reduces the competitiveness of exports, since price rises mean the cost of foreign countries buying UK goods is more expensive.
Thx a lot!! I always like your videos, you explain things really well.
Surely you'll always be better off getting a raise as you only pay tax on the money in that band? So if the tax bands began at £10,000 at 10%, then surely even if you got a pay rise of 1% from £9,950 to £10,049.50 then you'd be better off as you're only taxed on that £49.50?
Really Helpful! How many more videos do you expect to have for A2/ IB Macroeconomics?
Thanks.
lawrence rashid Still lots more coming
Thanks so much for all the videos. You are amazing
GREAT VIDEO! 👍👍👍
Thank you King for this video
Thank you!
Thank you very much!
If you have any more Videos for IB pls put them on as the IB Economics Exams are on Monday and Tuesday
Since inflation affects different people differently, some beneficially and some adversely, does this not make any government-directed or government-sanctioned inflation a political issue rather than an economic issue?
Thanks
Can fiscal drag really be a considered an overall cast despite it acting as a automatic stabilizer / non-discretionary deflationary fiscal policy?
Thanks for the vid Dal !!
Great explanation mate ! Que dios te bendiga
U helped me sm, thank u sm
Can fiscal drag work?
Income works in tax bands.
For example, 11000 being adjusted to inflation means 3% (inflation rate) is added..so that's £330 ontop of your income.
If that pushes you onto a tax band of 90% you're still making money because 90% is only taxed on that £330, Not the entire 11000..
The only way it can work out is it if the taxation rate is more then 100%, then you lose out.
The difference is that the £11000 you earned is the equivalent value of £10670 the year before following 3% inflation. Say there was a 10700 tax band at which point all income past this point was taxed at 20% - you would keep 80% of the increased wage that exceeded 10700. £300*0.80 = £240 but before your £10670 in real terms was being taxed at a lower tax band (say 10%) and therefore you kept more of your income in real (not nominal) terms.
10670 taxed at 10% leaves you £9603
11000 taxed at 10% up to 1700 and then 20% on all income exceeding this leaves ((10700 * 0.90) + (300 * 0.80)) = £9870
9603 adjusted for inflation (3%) is 9891, not 9870. Therefore your income has fallen in real terms.
@@maxcullen4120 Yeah, real income instead of nominal income
Can u explain how stable consumption makes consumers not hold back pls thank you love the vids
The stable consumption is a result of the healthy amounts of inflation - inflation can increase consumer confidence as economic growth occurs
indian maestro
Someone please help me out with what exactly is anticipated inflation
Workers think inflations gonna happen, so they go to their bosses and say I want my real wage to stay the same, to do this the nominal wage has to go up to adjust for the predicted inflation. If businesses now have to pay their workers more across the whole economy every businesses costs of production go up. If you shift SRAS inwards you will see that the price level increases. This means that the act of people speculating inflation made it a reality. It’s a self fulfilling prophecy. This is cost push
By the same token if consumers think that in the future inflation will happen this will cause their purchasing power (how far their money will go) to decrease. If you think you will have less money in the long run you will buy in the short run to maximise utility. Excessive consumption shifts AD, this causes demand pull inflation.
@@joshuagrifiiths9228 thx
Wenger out.
Now what do u think?
Arsenal’s a joke now
Nah they won the FA Cup recently, I think arteta ball is well and truly alive
•_• yeah that was my comment 2 months ago lol
@@zk_011 this didn’t age well
High inflation in the US 2018???
good good good
Very good 😉
Could you put these latest videos in a playlist please?
How does inflation link to a recession I thought that was deflation??
High inflation can suggest that changes in bank rates may be necessary and that a recession could occur, i.e. altering the interest rates (as we have seen this year). In turn, these deflation strategies can slow economic growth and rise the cost of living via more expensive mortgages and loans. Therefore, customer confidence and spending in the economy could decrease, leading to a negative multiplier effect that further pronounces these economic contractions as people spend less and save more (a cash leakage in the circular flow of income).
Hi everyone 😉
I love you king
***** Are you sure about inflation leading to reduced international competitiveness? Inflation leads to a depreciation of the domestic currency which makes domestic goods relatively cheaper on the international market.
Will Kinsella That effect (if it happens) will come later. The depreciation you have mentioned comes as a result of inflation eroding competitiveness and therefore there being a lack of demand for exports. The lost of int. competitiveness comes first, it is a killer for countries when it happens
Buy now with inflation
Only a strong and stable May govt can maintain low and stable inflation! Vote now!
Lad lad lad!
fucking legend
what the sus