Inflation rate

getting higher, it caused the short-term surplus losses and a rise in contribution rates. 2. Inflation is a problem in terms of OTPPB’s current assets allocation. By 2000, 60 per cent and 18 per cent of the plan’s assets were invested in equities such as stocks in public and private corporates and equity-return derivative contracts, and fixed-income securities, largely government bonds and debentures, respectively. Inflation not only tended to lead to short-term volatility of returns in equity…

Aggregate demand represents the inverse correlation between the total amount of real output demanded within the economy at various price levels in a particular period of time (Investopedia). Essentially, if the price of a product fluctuates, the rate of total spending will change along with the quantity of real output demanded (Brue, McConnell, & Flynn, 2014). The determinants, which affect the aggregate demand include consumer spending, investment spending, government spending, and net export…

REDUCES UNEMPLOYMENT A stagnant economy may create a higher rates of unemployment and the consequent social misery. A relatively developed economy like the UK or US observes an average rise in productive capacity of 2-3% a year (Romer, 2011). So, even with slow growth of 1% or less, we may get a rise in extra capacity…

Microeconomic variables can be used to predict how the economy will perform, both in the short and long run. Today, businesses have to make decisions in a complex environment. They depend on microeconomic variables when making decisions, which are drawn from data to make critical choices which play a critical role in the success or failure of the business. Therefore, the currency and reliability of information used by businesses when making these decisions affect the success or fail of…

historical definition currency has either been backed by an asset (i.e. gold) or backed by government guarantee in credit, which is essentially just promise of value. Money being backed by gold or other assets has consistently retained its value and inflation rate. On the other hand, “fiat currency” (money not guaranteed in value by physical commodity) has shown to be more elastic to cater to economic needs. There are cons as well: gold is a very scarce resource. When the world relied on the…

Inflation Rate Likewise, to the problems risen regarding international business because of unemployment, the same situations businesses need to endure, when the inflation rate rises. This is because the purchasing power of an individual is reduced, as the amount of goods or services they would be able to buy is reduced in quantity. For instance, “if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1…

government bonds issued in the inflated currency and are owned by investors. Investors see corporate profits. For debtors, this is a good news because they have to pay less. The biggest benefit if inflation rate is, it reduces the value of government debt. Government has several ways to control inflation. Government monetary policies are responsible for this. Government has the power to increase or decrease the money supply and its power affects the market and it’s participants. This paper…

The United States Economy is the largest in the world. It represents about 20% of global output. Behind China, The US is the largest manufacturer of the world. The US economy stays on top because of its natural resources, sophisticated physical infrastructure, and well educated workforce. The economy is in a good place right now. It is expanding at a moderate pace contrasting from the US years ago. Emerging from the recession in 2008 where the economy crashed bringing the housing market and…

Apple Incorporated, founded by Steve Jobs, Steve Wozniak and Ronald Wayne, is an international technology company based in Cupertino, California. Established April 1st 1976 as Apple Computers, Jobs, Wozniak and Wayne aimed to deliver personal computers to a mass audience (Richardson, 2008:online). However, Apple Computers shifted its focus from personal computers to consumer electronics, computer software and online services. This was reflected in their name change on January 9th 2007. Their…

capacity and net social welfare. Sustainable economic growth is the rate of economic growth that is maintained to prevent future economic problems for generations to come. An ideal growth rate is one that helps the economy stay in the recovery/expansion stage of the business cycle. The ideal growth rate to maintain a sustainable economy is between 2-4%. A growth rate below 2% is too slow for the economy to do well and at a rate higher than 4% economic growth becomes too fast to keep up. Growth…