Economic Performance

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by GFEcon6
Last updated 6 years ago

Discipline:
Social Studies
Subject:
Economics
Grade:
10

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Economic Performance

Economic Performance

Doesn't deflation makes us better off because things are cheaper? Deflation usually means falling wages and higher unemployment affecting workers. People with debt( mortgages, credit cards) are likely to be affected. Prices may be falling, but the amount of money you have to spend is also likely to be falling.Deflation also affects business because people are likely to wait to buy a luxery product as the prices continue dropping.

SOURCES:Pettinger , Tejvan. "Problems of Deflation Economics Help." Economics Help. Economics Help , 20 Oct 2014. Web. 14 Nov 2015. "Monetary Policy." Economics help. Web. 10 Nov 2015. Allen, Katie. "UK inflation reaches record low of 0.3%." Theguardian. The Guardian , 17 Feb 2015. Web. 10 Nov 2015. "International Monetary Fund." Wikipedia. Wikimedia Foundation. Web. 16 Nov. 2015.

The 2008 recession had a major impact on uk economy and the government implemented policies to help. 1). MonetaryPolicy 2). Fiscal PolicyWhich helped the crisis tremendously

Deflation is the opposite of inflation. It is the reduction of general level of prices in an economy. Value of money increases

Background

Uk inflation fell to the lowest level in January as the sharp drop in crude oil prices have helped bring down inflation.Inflation rate fell to 0.1% in Janurary the slowest pace in record since the Customers Price Index began in 1989

Problems with rapid deflation.1).Discourages customer spending. 2). Increased intrest rates3). Can also mean falling wages 4). Increased debt value.

The Government is looking into adjusting the monetary policy and rasing intrest rates

Monetary Policy: is the attempt to control inflation primarily through the use of intrest rates

Deflation

Current Crisis

Government Respnse

The UK is involved with an international institution called the International Monetary Fund (IMF). The purpose of the IMF is to reduce unemployment rates, promote international trade, and work to improve economies of its members countries. In hopes of solving the UK's deflation issue, the IMF implied the Monetary Policy.


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