Macroeconomics - Explain how inflation hurts productivity?

Question

Explain how inflation hurts productivity when businesses decide to invest in less new projects because high and variable inflation makes it difficult to determine the profitability of projects.

Answer 1

The increase in the risk means that only projects with a higher than normal expected returns will be undertaken which will lead to less investment and distort the economy. It will also lead to investments that have higher real risks to get the high expected returns because the real risk will be small compared to the inflation risk for the investment.

Answer 2

i've got constantly been against such gender-proper generalizations, yet this text is clever. 'The survey stumbled on that girls persons, on prevalent, presented 30 hours each week of direct affected person care, while in comparison with 35 from adult men, a consequence of lady docs - nonetheless under pressure disproportionately with infant rearing and different companion and toddlers projects - doing much less on-call artwork and being greater in all probability to take leaves. those figures have been then factored in with inhabitants numbers to calculate wellbeing practitioner productiveness according to capita. In 2007, women persons made up 32% of docs. yet with lady pupils accounting for greater or less 60% of scientific college instructions now, the numbers are predicted to even up interior a decade. while the male-lady stability reaches 50-50, basic productiveness could have decreased by utilising the equivalent of a million,588 male docs or a million,853 lady docs, all else being equivalent, the learn concluded. The decreased productiveness could be felt faster in specialties already transforming into lady-ruled, which includes pediatrics and obstetrics and gynecology, the researchers say.' i'm not for writing off one gender as an entire as inept or prodigious, yet I do understand that "there are various subjects that are actually not wisely studied, by using fact it quite is deemed a socially gentle subject rely.". very real!

Answer 3

Inflation hurts productivity because inflation is the direct cause of a recession. During a recession, people are afraid to spend money, thereby setting the course for and maintaining an inefficient economy. B

ecause the economy is inefficient, because people refuse and are reluctant to spend money, so too do people refuse to provide services. Such services include labor, thereby hurting productivity.