Inflation in Vietnam

The economy is known as a new emerging economy especially after entering WTO in 2007. The Foreign Direct Investment (FDI) has increase considerably and the GDP is over 8% in the period of three years (2005-2007). Nonetheless, it is clear that the economic instability occurs after WTO accession of Vietnam 1 year. Consequently, the economy has suffered surging inflation as well as trade and fiscal deficit. (Figure 1)

increased interest rates. Lastly, is the inability to start new businesses, which would benefit the

1. What is inflation? Inflation is an increase in prices for goods and services (What is Inflation?).

Primarily, you must understand that lowering the rate of interest will make it cheaper for people to borrow as well as make it cheaper to pay back existing loans. As a result, firms may use this money that they have saved to spend on upgrading the

Ronald Reagan once said, “ In a world wracked by hatred, economic crisis, and political tension, America remains mankind's best hope.”America may be mankind’s best hope, but will it remain that way? America is the beacon for freedom and equality, but with the recent election, it may difficult for us to remain a country full of diversity and hope. In order for the United States economy to prosper, the government must control inflation rates, raise employment rates, and change the current income inequality ratio.

Contractionary monetary policies lead to a leftward shift in the aggregate demand curve. This tells you an increase in interest rates will cause a leftward shift in Aggregate demand, which leads to price level and output decreasing. Since price level is decreasing employment, which is directly related to price level, is decreasing also. In addition, this means unemployment will rise and inflation will fall. These changes are represented on the aggregate demand and Supply curve (Graph 8) and the Phillips curve when the leftward shift in AD because a movement along the Phillips curve (Graph

Rates on mortgages and other types of loans have been fairly low, creating more access to capital for businesses and making big-ticket purchases more affordable for consumers. If the FED raises the interest rate it will have several effects on the consumer. It will reduce their purchasing power and consumers shopping habits will be influenced. The decrease in purchasing power leads to a decrease in

Many adults and teenagers living in the present day still do not know why saving money is important. As much as we all hope emergencies won’t happen, the truth is we all know that sometimes they are unavoidable. If you do not have a safety net to lean on when these problems arise they can rapidly turn into additional debt and loans. Setting a little money aside will assist you when these life emergencies arise. Saving money also helps people achieve and aspire to their personal, social, political, and environmental goals. Once you have enough money saved you can become financially independent and able to make your own choices about how to spend your money. Additionally, saving money gives you peace and satisfaction. Knowing that you have your finances in control feels commendable. Not having to worry about sudden emergencies or costly repairs lowers your stress levels. Saving money helps in sudden emergencies, assists

Higher interest rates are never a good idea for a growing economy because it can directly impact it. Higher interest rates can affect

Therefore, one of the expansionary activities conducted by the Federal Reserve is to set federal fund rate lower, which will affect credit availability, the money supply, interest rates, and security prices. That is to say, ceteris paribus, when the Federal Reserve buys securities in the open market, bank’s reserve accounts (deposit and assets) increases and when the discount rate is lowered it reduces the interest rate in the economy, thereby promoting borrowing, excessive spending by the economic agents, possibility that household, business and government will invest in fixed assets, increment in household purchasing durable goods (plant , state and local government and construction of new

Inflation in America has been on the rise in the past decade. As the goods needed continue to increase, the cost goes higher. “I haven’t yet defined the word “inflation.” Now we’re ready: inflation is a rise in the general level of prices as measured by a price index like the CPI. Inflation is not a rise in the price of a particular good or service, such as gasoline. An increase in real gas prices is called an increase in the relative price of gas. And the rise in the nominal price of gasoline is meaningless since it doesn’t compare gas prices to any standard such as a price index or the price of another good.” (Luis D Johnson March 21st, 2012)

As a significant proportion of household consumption is based on borrowing and if the cash rate falls, the amount households can borrow will increase

A: Investment spending depends on interest rates due to opportunity cost and risk. For example, when interest rates rise, the opportunity cost of your investment also increases. When interest rates are higher investors are willing to pay less for payment in the future. Which in turn leads to a lower rate of investment. The opposite can be said for falls in interest rates that are met will lower opportunity costs.

I Poonam Pillai hereby declare that the term paper report titled study on Inflation in India that I have submitted is original. I was in regular contact with nominated guide and contacting him for discussing the project.

Having joined the World Trade Organization (WTO) in November 17, 2006 opens to Vietnam lots of advantages regarding the economy. According to the major principles, joining WTO brings Vietnam to the expansion of market and increase in exports. Especially in agriculture and textiles, WTO has set out various measures to gradually eliminate