General price level

General price level

An index that measures the change in price of goods in an economy over time and hence the purchasing power of the currency of the country. For instance, in the U.S. it is represented by the CPI (Consumer Price Index) maintained by the U.S. Department of Labor. 
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As the general price level stabilized, the prospective gains from holding these inventories fell further, causing more reductions in inventories resulting in another decline in demand.
However, this cost of inflation may be among the least onerous on my list, since information is readily available to businesses and individuals on the general price level each month.
The only explanation that we can offer for the anomalous result--that movements in money supply fail to cause changes in consumer prices--involves (1) the fact that price controls have existed on major commodities at the retail level for quite some time, making CPI less responsive to movements in the money supply, and (2) the fact that CPI is not as broad a measure of the general price level as WPI.
On the other hand, it is because of the substantial change in the general price level that real income will reveal a significant increase in the determination of real cash balances.
On the other hand borrowing from commercial banks in general and from central bank in particular can also have serious consequences for the general price level.
A higher general price level (with a lag of 6 months), in this case, tends to induce a higher EOS index, as such rise in price level will provide a higher amount, in money terms, of the service exported.
For example, a uniform VAT would result in a one-time increase in the general price level.
Duggal, and Cynthia Saltzman present "The Sensitivity of the General Price Level to Changes in the Price of Crude Oil.
When these errors are corrected and the ambiguities cleared, it seems quite logical that an aggregate demand curve should exist and that there should be an inverse relationship between the general price level and aggregate quantity of goods demanded.
Gold's most natural relationship to the general price level is what one might expect for any good or asset: A higher general price level should be associated with higher gold prices.
When there are second-round effects of the relative price shift (up or down) being passed on to the general price level, it is a problem.
There will be a cumulative effect on the general price level, and it will be difficult for the majority of the people to keep their body and soul together.

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