the price of goods dramatically increases over a short period of time. In Dinner Party (Page 42), it is discussed that an important issue in the economy is how we handle inflation over time. This is caused by the population spending to avoid pending expected price increases and creates a cycle that is hard to control. Hyper Inflation occurred in Germany in the 1920s as a result of a government program that issued debt (bonds) to raise money to pay for the results of World War I. While analysing…
According to the National Bank of Ethiopia (NBE), inflation is highly correlated with the price of food. Referring to Table 2, which shows the share of food in the consumer goods basket, the national level is 58%, while the expenditure on food by the urban residents is 55%. On top of that, 85% of the population being a rural residents and deriving their livelihood from agriculture, the overwhelming source of food is domestic production. Imported food is insignificant, amounting to less than 5%…
government and Federal Reserve Bank to help regulate the interest rates: fiscal and monetary policy. Both the fiscal and monetary policies have made an impact by help stimulating or slowing down the economy. the fiscal policy is the government regulates the economy by using its powers to tax and spending money. The monetary policy is the government manages the economy by controlling the money supply through regulation in interest rates. While both policies can help benefit the economy to either…
The exchange rate is the value of one currency for the purpose of one conversion to another. These transactions occur in the FOREX market and is considered floating when the exchange rate is determined by the interaction between demand and supply. For this reasons, exchange rate movements have a significant impact on international competitiveness, trade flows, investment decisions, inflation and many other factors in the economy. Under Australia’s floating exchange rate system, the value of…
services produced, increased at an annual rate of 1.3 % in the second quarter of 2012 ("Bureau Of Economic Analysis", 2012). Although these numbers look promising and indicators are leaning toward a slow but accelerated growth, consumer expectations will continue to affect demand. The economy’s performance in the next year will also depend on the 2012 election, what Congress and the administration do, unemployment rates, interest rates, and inflation. Expectations are personal feelings of…
the supply of money to keep the inflation rate low. (http://www.bankofcanada.ca/about/) Monetary policy Definition: Bank of Canada controls the supply and circulation of money to alter inflation and interest rates. Monetary policy will stabilize prices, protect consumers, and boost the economy. Example: Monetary policy is operated by the Crown Corporation, which is the Bank of Canada. The Bank will adjust the rates whenever it is needed. When the inflation rate is high, consumers are spending…
(BLS) announces the value of unemployment rate for the previous month. The rate is a key measurement of how the economy is doing, the announcement is widely watched and if the unemployment rate is different from what the financial market expects, there will be large movement in those markets. Therefore, it is important to know how the Bureau of Labor Statistic works with the unemployment rate. Measuring Unemployment There are data of unemployment rates released each month by the BLS, it is…
This role is specifically played by the central bank of a county, whose mandates include the control of a country’s money supply, establishment of the foreign exchange rate, and the manufacture of new bank notes and coins (Perry, Serven, & Suescun, 2008). A look at Canada offers a special scenario, whereby the central bank is a corporation of the monarch. As such, all the bank’s shares are solely owned by the crown who…
figure is higher because net exports grew by much more than expected in the March quarter. According to (Amadio, 2016) the 3.1% gross domestic product (GDP) figure is crucial because the economy needs to grow around this speed to stop the unemployment rate rising. National disposable income: This is how much Australians pay for their day-to-day expenses. The figured dropped by 1.1% over last 12 months; this means that employees are being paid less for what they’re producing. Average weekly…
However, the GDP growth rate has declined significantly to 5% in the last 3 years (Department of Economic and Policy Research Reserve Bank of India). The slowdown of the economy has been broad based, as shown in Table 1.0, the figures indicate significant deceleration in manufacturing…