What does inflation mean? Surely that's only on a national level right? It cant hurt everyday Australian small businesses? Can it!?
The International Monetary Fund (IMF) has warned that the risk of inflation is very real for the Australian economy, In its Regional Economic Outlook for Asia and the Pacific, released on Thursday, the IMF says that for the region as a whole, consumer price inflation accelerated to about 4.5 per cent in February.
So what is Inflation? > Inflation refers to the general increase in goods within society and the decline of the worth of cash money. Inflation hurts the productivity of society as it is the direct cause of a recession. During a recession, people are afraid to spend money, thereby setting the course for and maintaining an inefficient economy. Because the economy is inefficient, businesses refuse and are reluctant to spend money to produce the goods they usually offer! This then becomes a circular pattern and was the prime result of the Great Depression witnessed in the 1930's on a global scale!
The article continues by stating the reason for an increased risk of inflation within the Australian economy is largely due to the rise in fuel and food prices, which is beginning to feed into core, or underlying, inflation. "Headline inflation is generally expected to increase further in 2011, before decelerating modestly in 2012," the IMF says. The IMF has also again urged the Australian government to consider saving to boost the government revenues from higher commodity prices. "(This would) ensure a more equal distribution of its benefits across generations and reduce long-term fiscal vulnerabilities from an aging population and rising healthcare costs," it says.
BUSINESS CONCEPTS:
Inflation, Economic interception by Government, World economies
QUESTIONS:
1) Research the Great Depression and make a time-frame or mindmap of the sequence of events that lead to such a bad recession
2) How does the Australian Government intervene in stimulating or retarding the Australian economy to ensure appropriate growth?
Read the entire article here:
http://www.businessspectator.com.au/bs.nsf/Article/Inflationary-risks-on-the-upside-IMF-says-GCC4U?opendocument&src=rss
The International Monetary Fund (IMF) has warned that the risk of inflation is very real for the Australian economy, In its Regional Economic Outlook for Asia and the Pacific, released on Thursday, the IMF says that for the region as a whole, consumer price inflation accelerated to about 4.5 per cent in February.
So what is Inflation? > Inflation refers to the general increase in goods within society and the decline of the worth of cash money. Inflation hurts the productivity of society as it is the direct cause of a recession. During a recession, people are afraid to spend money, thereby setting the course for and maintaining an inefficient economy. Because the economy is inefficient, businesses refuse and are reluctant to spend money to produce the goods they usually offer! This then becomes a circular pattern and was the prime result of the Great Depression witnessed in the 1930's on a global scale!
The article continues by stating the reason for an increased risk of inflation within the Australian economy is largely due to the rise in fuel and food prices, which is beginning to feed into core, or underlying, inflation. "Headline inflation is generally expected to increase further in 2011, before decelerating modestly in 2012," the IMF says. The IMF has also again urged the Australian government to consider saving to boost the government revenues from higher commodity prices. "(This would) ensure a more equal distribution of its benefits across generations and reduce long-term fiscal vulnerabilities from an aging population and rising healthcare costs," it says.
BUSINESS CONCEPTS:
Inflation, Economic interception by Government, World economies
QUESTIONS:
1) Research the Great Depression and make a time-frame or mindmap of the sequence of events that lead to such a bad recession
2) How does the Australian Government intervene in stimulating or retarding the Australian economy to ensure appropriate growth?
Read the entire article here:
http://www.businessspectator.com.au/bs.nsf/Article/Inflationary-risks-on-the-upside-IMF-says-GCC4U?opendocument&src=rss
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