Rising food prices could have another serious impact. Increases in food and fuel prices may also significantlyincrease the prospect of social unrest in poorer countries. The financial market in emerging markets anddeveloping countries will also be affected, raising the prospect of a sharp tightening of global financialconditions as well as capital outflows. The depth of the impact on the global economy depends on how longthe war lasts, and the scale of the disruption it causes.There is no signs Russia is willing to relent anytime soon, despite the international sanctions targetingimportant sectors of its economy, from oil and gas to its financial system.d. If the government gives subsidy to the producer of wheat, which party will benefit more? Explain youranswer using an appropriate diagram. RISING FOOD PRICES DUE TO RUSSIA-UKRAINE CONFLICTWhen Russia invaded Ukraine in February 2022, no one knew how long the conflict would last, or how deepthe impact would be for Europe or the rest of the world. As the war approaches its third month, the outlookfrom the conflict does not look good.Against an already global inflationary pressures due to rising food and energy prices and disrupted supplychains following the coronavirus pandemic (Covid-19), the war between Russia and Ukraine is increasingsupply and demand tensions, affecting consumer sentiment and global economic growth.The World Bank and International Monetary Fund (IMF) expected supply shocks to increase dramatically forcommodity prices in cases where Russia and Ukraine are major suppliers. Russia is a major supplier of oil, gas,and metals, and, together with Ukraine, of wheat and corn. Reduced supplies of these commodities havedriven their prices up sharply.The impact of the war in Ukraine was already slowing down Europe's economy. This is because the highinflation that's beginning to weigh on incomes and on consumption, and energy prices are weighing onproducers. The combination of supply-chain strains, inflation and the pandemic, together with the war, arethreatening global food supply.The Ukraine-Russia region is seen as one of a small handful of global "breadbaskets" (or major foodproducers) and plays a vital role not only as an exporter of primary staples like wheat, but also as one of themajor suppliers of fertilizer worldwide.There are six breadbaskets that together supply roughly 60 to 70% of global agricultural commodities. TheUkraine-Russia region is responsible for roughly 30% of global exports of wheat and 65% of sunflower, in acontext where those markets are increasingly tight and interconnected. Therefore, a slight disruption in supplycreates some impact on price.

In this case, Russia and Ukraine war are discussed here. Actually Covid-19 pandemic attacks the…

Rising food prices could have another serious impact. Increases in food and fuel prices may also significantly increase the prospect of social unrest in poorer countries. The financial market in emerging markets and developing countries will also be affected, raising the prospect of a sharp tightening of global financial conditions as well as capital outflows. The depth of the impact on the global economy depends on how long the war lasts, and the scale of the disruption it causes. There is no signs Russia is willing to relent anytime soon, despite the international sanctions targeting important sectors of its economy, from oil and gas to its financial system. d. If the government gives subsidy to the producer of wheat, which party will benefit more? Explain your answer using an appropriate diagram.

Rising food prices could have another serious impact. Increases in food and fuel prices may also significantly increase the prospect of social unrest in poorer countries. The financial market in emerging markets and developing countries will also be affected, raising the prospect of a sharp tightening of global financial conditions as well as capital outflows. The depth of the impact on the global economy depends on how long the war lasts, and the scale of the disruption it causes. There is no signs Russia is willing to relent anytime soon, despite the international sanctions targeting important sectors of its economy, from oil and gas to its financial system. d. If the government gives subsidy to the producer of wheat, which party will benefit more? Explain your answer using an appropriate diagram.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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