What is the victim's ratio?
The victim's ratio is a type of evaluation that is used to identify the changes that are necessary for the economic production of the nation to shift the inflation rate to a more acceptable level. Depending on what is happening to the economy, this may include steps to discourage certain types of growth in the economy as a means of slowing the inflation rate. At the same time, measures can be taken to support growth in certain sectors of the economy as a means of moving this economy from the recession. The calculation of the victim's ratio makes it easier to understand the costs incurred in reducing the economic input to restore a certain degree of economic balance.
The basic formula for determining the victim's ratio requires the identification of the expected impact of slowing parts of the economy for the purpose of addressing growing inflation. Once the costs of this lost production are determined in terms of monetary quantity, the number is divided by the current level of inflation, expressed as a percentage. After determination, the victim's ratio makes it easier to find out whether the output changes has beeny sufficient to slow down or stop the inflation rate, so the economy is on a more stable foundation.
Determination of the victim's ratio can also help determine whether the effort to slow economic production was too serious, which effectively prepared the way for the economy to enter the period of recession or possibly depression. If the results that the output slowdown caused an extreme shift in the level of inflation can be taken steps to initiate support for increased production in selected economy sectors. By monitoring the movement of the output and using this process to calculate the victim's ratio, it is possible to slow down the movement towards the recession and control the inflation rate as a means of moving the overall economy to State, which is considered to be beneficial for most individuals and enterprises that operate in a defined geographical area.
As with most calculations used to measure the state of the economy is the victim's ratio as good as the collecteddata. This means that if the information regarding the reduction of economic growth is not complete, the ratio will be inaccurate and the results will not represent the actual state of change in inflation. As a result, you can take steps that can cause long -term damage to the economy, either by not controlling a forward march of inflation or forcing the economy to recession or depression that creates widespread economic problems.