# Inflation - IGCSEBus by pptfiles

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```									   Inflation & balance
of payments

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Inflation rates

Thailand       3.4%
UK             3.1%
Malaysia       2%
Cambodia       18.7%
Indonesia
Inflation
Low Inflation
Inflation
Thailand’s Inflation Rate
The inflation rate in Thailand was last reported at 3.40 percent in July of 2010. From 2000 until
2010, the average inflation rate in Thailand was 2.51 percent reaching an historical high of
9.20 percent in July of 2008 and a record low of -4.40 percent in July of 2009. Inflation rate
refers to a general rise in prices measured against a standard level of purchasing power. The
most well known measures of Inflation are the CPI which measures consumer prices, and the
GDP deflator, which measures inflation in the whole of the domestic economy.
Inflation rates
“inflation” refers to a general           Inflation is measured by
rise in prices measured                   comparing two sets of goods
against a standard level of               at two points in time

Related concepts include:
Deflation - a general falling level of prices
Disinflation - the reduction of the rate of inflation
Hyper-inflation - an out-of-control inflationary spiral
Stagflation - a combination of inflation and poor economic growth
Reflation - An attempt to raise prices to counteract deflationary pressures.
Nurses case study
1 – cut down
2 – fold in half
3 – stick in neatly

4 – answer the following questions

•If a nurse gets paid £19,000 per annum, how much
more money is 2.75%? (show your working out)

•Explain what is meant when the article states that in
real terms, nurses are facing a pay cut.

5 – Q&A UK inflation measures
Economic growth
Thailand’s GDP = \$272.43bn

Laos’s GDP = \$5.4bn

Cambodia = \$10.35bn

Malaysia = \$221.77bn

India = \$1.16trn

America’s GDP = \$14.3trn

UK’s GDP = \$2.67trn
unemployment
Unemployed people do not contribute towards the
economy, but actually cost the economy money

The lower the unemployment the better.
UK August = 7.8%.
Thailand August = 1.4%
Balance of payments

Imports              Exports

฿20                    ฿10
฿8                  ฿120
0               Deficit = ฿10
Surplus = ฿40
Balance of payments
Thailand             \$3bn surplus (2001)
UK                   \$25bn deficit
India                \$1.1bn surplus
America
Cambodia
Malaysia
Indonesia
Homework
7 (a) Analyse the benefits to your country’s economy
from a multinational manufacturer of computers locating
a new factory there.
LO

Explain how government intervention such as:
•Fiscal policies
•Monetary policies
can influence the economy.
Government intervention
Most countries have a mixed market economy.
The government will have some influence on the
performance of the economy.

Fiscal policy          Monetary policy

Interest rates

Spending &
taxation
2 minute discussion
Discuss with the person next to you, what effect your
‘card’ would have on the economy.

End

The economic cycle
Fiscal
policy
Increase
in GDP

Increase
Decrease
in
in GDP
inflation

Economy
slows
down         Monetary
policy
Economic cycle
Now complete the economic cycle, using these
Unemplo
Increase   Decrease               Increase
yment at                 Increase
in GDP     in GDP                 interest
its                  unemployment
rates
highest
spend       public        in        make           to
less      spending   inflation   less sales   expand /
open

Reduce
taxes
Homework

Complete inflation work sheet, answering all 4
questions.
What have we learnt?

Discuss with a
partner before you
share it with the class

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