Outline Of An Project On Inflation Essay

Management is the process of directing resources, organizing in order to effectively maintain and achieve business, organizational goals and creative problem solving. Directing resources means people, materials, finances and information. “Those who become managers and successful leader are the people who can best transmit their views, ideas, and enthusiasm to others” (Baldwin & Bommer, 2008, pg. 47). The goal of management is to accomplish the business mission and objective. To be a successful manager, you need skills in decision making, financial analysis, interpersonal relationships, and communication as well as the ability to apply those skills in a context of restraints, opportunities, and options. The following management analysis paper

Foremost, I would like to express my sincere gratitude to my advisor Ms. Upekha Manamendra for the continuous support of create this report, for her patience, motivation, enthusiasm and immense knowledge. I could not have imagined having a better advisor and mentor for create my report.

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

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.

“Provide Summary Level Paper (limit 10 pages) “Purpose and Practice of Inflation Forecasting by Nation” – for insertion after the “Measures of Inflation”

In the 1970s and 1980s the Canadian economy was plagued by issues of inflation and unemployment, or stagflation, as it came to be known. It is generally believed the “severe years of surging inflation and unemployment were the result of the first (1973-1974) and second oil shocks (1979-1980), and the double digit inflation rates in many countries (though not all) that provoked the sense of crisis in these years were caused by the high price of energy, a major factor input” (LK, 2011). However, it is clear that inflation was already a problem in Canada prior to these oil shocks. What caused the inflation in the 1970s is of some debate; but it most likely resulted from the overly-expansionary monetary policies employed by the Bank of Canada;

It widely recognized that the monetary policy within a country should be primarily concerned with the pursuit of price stability. However, it is still not clear how this objective can be achieved most effectively. This debate remains unsettled, but an increasing number of countries have adopted inflation targeting as their monetary policy framework. (Dr E J van der Merwe, 2002) This topic of Inflation targeting is a subject which immediately conjures different perceptions from different people. Many feel that low inflation should be a main aim of monetary policy, while others (such as trade union activists) believe that a higher growth rate to stimulate jobs should be the main concern.

The stabilization is mostly necessary during times of inflation. If the nature is demand push, whereby the prices are increasing due to increase in demand of commodities, increase in tax and decrease in government spending will reduce the pressure

Why is inflation bad for the American economy? Imagine going into the popular local food market or gas station several times a week. After a couple of weeks, imagine going into these stores and noticing the prices have steadily increased over the past few months. This is called inflation, and it is causing many problems in the United States. There are three different types of inflation: demand-pull, cost-push, and built-in. Demand-pull inflation occurs when prices increased because of such high demand. Cost-push inflation is when prices surge resulting from high input costs. Built-in inflation is when prices continue to rise after any natural causes. The inflation occurring in America is a demand-pull. Inflation has affected the United

Economic inflation is large issue that tends to take place everywhere, this has even appeared in the early days of the United States. To be exact, inflation is the rise sustained in the general level of cost on services and goods over time in an economy. When the cost level grows the unit of currency buys less services and goods. Some causes for inflation include: push in profit, productivity decline, increase in house prices and the printing of more money. Often times these result in services and goods becoming less affordable due to an increase in prices.

There have been different views from John Maynard Keynes, Milton Friedman and central banks when it comes to inflation. However, what both John Maynard Keynes and Milton Friedman can agree on is the fact that inflation is seen to be a great evil. Moreover, the central banks interpret inflation as moderate being the fact that some inflation is seen to them as tolerable. Historically, Friedman and Keynes have had disputes on a better system for the control of inflation. For instance, Friedman put forward the monetary policy for the government to use in order to keep interest rates to stabilize an economy, whereas Keynes believed the government should be in control of inflation by the amount of spending produced between goods and services. Central banks have viewed both reasoning’s to Keynes and Friedman’s theories and decided the monetary policy is the best route for an economy to take. A great example of this can be illustrated in Canada with inflation rates only being kept between 1 and 3 percent. The other factors that central banks might have to deal with in other countries would be the change in political views and how much power the government has over central banks to control cash flow throughout their respective countries. The central banks must also avoid dealing with poor decisions made by government leaders which could affect the economy tremendously. In many underdeveloped countries, there have been a lot struggles even until present day where government leaders

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)

The famous American economics columnist Hazlitt (1978) has ever said that there is not a problem such as the inflation has been discussed too many times and it is not easy for people to understand.

There are different influences that cause inflation such as energy, food, commodities, and other goods and services. The entire economy is affected by rise of the cost of living. It also affects the cost of operating a business, borrowing money, mortgages, corporate and government bond yields, and every other aspect of the economy. There are several advantages of inflation in the economy. Some include moderate rates of inflation which allows prices to adjust. This is considered a sign of a healthy economy. With economic growth available we usually get a generous amount of inflation. Also moderate inflation rate reduces the actual value of debt. If there is a reduction, the real value of debt increase leads to a squeeze on usuable income.

Due to the inflation, Malaysia government already applied different strategies to face the inflation that occurred recently. Bank Negara Malaysia controls the inflation rate by implementing the monetary policies such as influence the level of interest rate that commercial banks have to pay on their loans. Sometimes commercial banks have unexpected or urgent needs for extra funds, Bank Negara Malaysia will make a short term loan to them in such case. Acceptable collateral and a promissory note (IOU) such as government securities are given when commercial banks borrow. Bank Negara Malaysia will obstruct commercial banks to make loan from them for obtaining additional funds when the inflation