Causes and Effects of Inflation

Causes and Effects of Inflation Inflation is an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand (Webster, 1983). Inflation is a rate which there is a continuous rise in price of goods and services in a country over a period of time. It is happen when there are too much money in the economy chasing after too few goods. The symptoms of the inflation are when all the price of goods and services keep rising and when the currency value in the country start falling. When inflation happen, the purchasing power of people will start falling. The price of goods and services are too high, so people start buying less and consume less. Every country hope to achieve a low inflation rate but it is not a easy job to realize it. It is same goes to India. India is a country in South Asia. There are about over 1.2 millions of people in India. In 2011 and 2012, India has a high inflation rate in the country. According to the chart ( Appendix 1), in 2011, there is a almost 10% of inflation rate for the year. It is consider as quite high rate of inflation. In 2012, the inflation rate has fall compare to 2011. It is between 6.87% to 8.07%, it is still a high inflation rate. 2.0 Causes of Inflation 2.1 Demand pull inflation One of the causes of inflation are the population and the demand is rising, the population is 1.22 millions of people in India. When there are too large number of people, the demands of goods and services increases and the goods and services may not enough to supply the people, therefore the price is going up, thus cause the inflation. 2.2 Import cost push inflation The import cost of goods and services also push the inflation rate to rise. It is because more import than export in the country. When India is reliant on importation of some goods and services from other country, India has to pay all the import costs even if the import costs is too high. Paying import costs also made the money of India keep flowing out from the country, so inflation happen. 2.3 Excessive money supply. When there are too much money flow in the market, it causes money supply in the market become excessive. It is happen when the stage of boom, people have too much money in hand, so the consumption is increased. 2.4 Expectation Expectation is occurred when the price of goods and services are expected to rise in the market. Sometimes, it also happen when the neighbour countries are facing the inflation and rising of goods and services. When the price of goods and services become high, inflationm occurs. 3.0 Argument Although import costs can push inflation, but it doesnt influence much in India. This is because there are many foreign investment or many foreign investors like to open business or build factories in India due to low cost of labour forces and large numbers of labour forces especially in cars manufacturing industry such as Toyota, Bentley, and others are having factories at India. Therefore, the government of India would not need to import so much cars from others countries. There are enough supply of cars in India. Therefore, the government of India can cut down some costs on importation. 4.0 Impact 4.1 Weakening of currency value. The currency use in Indian is Rupee. Currency value can be says as the exchange rate or the money is cheaper or more expensive compare with others countries.The exchange rate of Indian Rupee (INR) to United State Dollar (USD) 2012 December is about 54.4900 rupee to 1 dollar (Appendix 2). In 2011 December, the exchange rate is about 53.0100 rupee to 1 dollar (Appendix 3). This show the currency value of rupee is still weakening since last year. When the currency is weak, it does not have any value. Indian people will not like to hold the money in hand. When the people spend the money, the inflation rate will rise. This is because many people want to spend the money but they have to chase after too few goods. When this happen, the price of goods and services will definitely rising. The price of goods and services are so high but the currency value is dropping. This results to the money printed is getting larger. For example, in Indian, there are 1000 rupee (Appendix 5) to be printed wh ile Malysia only has RM 100. 4.2 Falling of purchasing power. Due to continuous price ricing of goods and services, people in Indian has no money to consume the goods and services. Looking at the Consumer Price Index (CPI) at appendix 4, the price of goods and services and ricing for every year. It is getting harder and harder for people to spend or consume on goods and services. For examples, the vegetable being sold on the city of India is about 50 rupee to 55 rupee per kilogram and 20 rupee for the tomato. Therefore, people buy less than before. 4.3 Draw away foreign investment. Since the inflation happen in India, the foreign investors does not want to operate the business and factory or even invest anything at India. The foreign investors want to invest in a safe condition such as less fluctuation in currency value and more stable on the price of goods and services. The foreign investors want to gain profits or revenue through their investment. If inflation happen, it is hard to ensure the investment bring any profits or revenue for them. When the foreign investment is being drew away, there are less economic growth in India. The job opportunity also decrease and lead to high unemployment rate. 4.4 Cost of living increases. When the price of goods and services are too high, the cost of living will also increases. There are some neccessity good which every family need it. There are no way to avoid from consuming these goods such as toilet tissue, detergent and others. The price of these goods will also rise. Since it is necessary to every family, although the price is high, people will still buy and consume it. This make the cost of living increases. 4.5 Unemployment rate increases. When there is an inflation, the business has to cut down the operational and manufacturing cost as much as possible to cover up the high cost of the resources. When this happen, it will lead to unemployment. The business will cut down down some labour force. Many people will lost the jobs. Therefore, the unemployment rate will increases. In December 2011, India has about 9.4% of unemployment (Appendix 6). It is consider as a very high figure. It is also causes by when the foreign investors close up the business due to inflation. It make many workers lost the jobs. 4.6 Slow economic growth. When inflation happen, the economic growth will be slow. It is because many of the business cannot be expand or even become smaller during this period due to the high cost of the resources and low currency value. Business has no any extra money to boost the economic growth and some even cannot stand with the high price of raw materials and decide to close up part of the business. Therefore, the economic growth will slow down. The economic growth in India 4.7 Argument Although draw away the foreign investors is one of the impacts which cause by inflation, but it is not obvious in India. It is because the labor forces are very cheap in India. Therefore, many investors still willing to invest in India but they usually invest in the business which exports the goods to other neighbour countries in India and only a little goods to sell at India. For example, some graduates who are Pavan and his classmates are being offered average annual salaries of $7,000 (Â £4,370), about 15% lower than similar graduates were getting a year ago (Logita Limaya,2012). 4.0 Efforts taken by Government 4.1 Government encourages to reduce interest rate to boost economic growth. Government of India want to reduce the interest rate which is the interest rate or the borrowing cost to boost the economy growth. The Reserve Bank India (RBI) kept interest rates on hold, ignoring government pressure to reduce borrowing costs, but said it was shifting its focus towards boosting a flagging economy, raising the odds of a rate cut as early as January (SuvashreeDey Choudhury and AradhanaAravindan, 2012). If the interest rate can be reduced, business will have more capital by borrowing the money from the bank to expand the business. Thus, it helps to boost the economic growth. 4.2 Increase the government income and boost economic growth by exporting more cars. Government wants to increase the number of export on cars. The cars are mostly exported to Sri Lanka. It is hard to increase the exportation because the import tariff of Sri Lanka. Government is negotiating with Sri Lanka by asking them to bring down the import tariff. If the negotiation is successful, the exportation can be increase. When exportation increases, it means there is more job opportunity for the labor forces in India and the unemployment rate can be decreases. The economics of India will also grow up and more income can be generated by the government. 4.3 Open market operation Open market operation is central bank of India selling or buying bonds, securities, treasury bills and others during inflation. It is to reduce the money flow in the economic so the consumption will be less and inflation rate can be reduces. In Jan 2012, Reserve Bank India (RBI) is open for more open market operation. The government of India and the Reserve Bank India has decided to have more open market operation to reduce the high inflation rate in India by selling the bones, securities or treasury bills to the people. We are open to more open market operations if the liquidity issue needs to be addressed. The cut in CRR (cash reserve ratio) is purely a liquidity measure. It has put in Rs.32, 000crore, SubirGokarn, deputy governor of Reserve Bank of India (Business, 2012). The example of open market operation done in India is selling government securities (Appendix 7). 5.0 Recommendation 5.1 Control over the formation of monopoly firm. To reduce the inflation rate, government can control the formation of monopoly firms. In India, there are many monopoly firms which are being formed. For examples, Hindustan Aeronautics Limited (HAL) is monopoly over the production of aircraft, Indian Railway has monopoly on the railway transportation, State Electricity Board has monopoly in the field of electricity in many state and others. Every government does not like the formation of monopoly firms. It is because when there is not other company to compete against these firms, the quality of services or goods will not be improve and the monopoly firms can always increase the price of goods and services as they like. Therefore, government can encourage more firms or companies to set up or compete by borrowing them some loans with conditions. 5.2 Government can provide subsidies on some goods and services. The prices of goods and services are very high during inflation. People will suffer in paying these goods and services. Therefore, government can make some policy and try to provide subsidies on some price of goods so that people is able to consume it such as sugar, petrol, diesel and others by providing some subsidies. This will help the people so that their living cost can be decreases. 5.3 Government can set the minimum price for imported goods and maximum price for local goods and services. People like to consume foreign goods or imported goods rather than local goods. It is because imported goods are more branded in the international level. By setting up the maximum price for local goods and services, it may helps the local manufacturer to attract the customers and increase their profits, thus, the income level of the people can be also increases. If the government set the minimum price for the imported goods, less people may buy or consume the imported goods and more people will try and consume the local goods. This may lead to higher economic growth in India. For examples, government can set the minimum price for imported goods like car, electronic device and others while government can set the maximum price for local goods such as daily products, food and others. 7.0 Conclusion During inflation, currency value is very low and all goods and services are having chain reaction. People will suffer on it and standard of living is dropping. It is hard to decrease the inflation rate in a country and the damage cause is hard to recovery. This is why every country wants to achieve the minimum inflation rate. In India, Inflation has made the currency value which is rupee to be weaker. The government is not willing to look at this and try to decrease the inflation rate. If the inflation rate continues to rise, the currency value will continue to drop and it may become almost worthless. Purchasing power also affected by the inflation. People will have less purchasing power if the inflation rate is high. Besides, inflation also draws away the foreign investors. This makes the economy of India to be slowing down. The cost of living in India also increases. Since the prices of goods and services are rising, people of India have no choice but to spend more money on buying these goods and services. Unemployment rate also increases. It is happened when business is cutting down the cost by firing workers or the business is closing up, people lose the jobs. Government of India has made some effort on controlling the inflation rate to avoid it to increase and even targeting to decrease it. Government has encouraged the Reserve Bank of India (RBI) to reduce the policy rate which is the interest rate to boost the economic growth. It is to lend the loans for business to be expanded. Moreover, government of India is negotiating with Sri Langka to bring down the cars import tariff so India can export more cars to increase the exportation and government revenue. Government of India and Reserve Bank of India also sells bones, securities, treasury bills and others to reduce the money flow in the economy. When people hold the money in hand, the money will be use or buy things and it makes the inflation more worst. When government has this open market operation, the money will go into bank and no flowing in the economy. It helps to reduce the inflation rate. In conclusion, there are more strategies or policies can government of India plan to reduce the inflation rate. Government can control over the formation of monopoly firm. If it is successful, there are no ways to let this firm to raise the price as they like. Government also can set a fixed price for some of goods and services by providing some subsidies. It helps to decrease the burden which people have during inflation. Government can set the minimum price for imported goods and maximum price for local goods and services to attract more people on buying the local goods and services. 6.0 Appendix Appendix 1 Figure 6.1 India Inflation Rate Appendix 2 Figure 6.2 India Exchange Rate (Monthly) Appendix 3 Figure 6.3 India Exchange Rate (Yearly) Appendix 4 Figure 6.4 India Consumer Price Index (CPI) Appendix 5 Figure 6.5 India Printed Money Appendix 6 C:UsersuserDesktopindexmundi_ex74.jpgFigure 6.6 Unemployment Rate Appendix 7 Yield based auction of a new security Maturity Date: September 8, 2018 Coupon: It is determined in the auction (8.22% as shown in the illustration below) Auction date: September 5, 2008 Auction settlement date: September 8, 2008* Notified Amount: Rs.1000 crore * September 6 and 7 being holidays, settlement is done on September 8, 2008 under T+1 cycle. Figure 6.7 Indias Securities Coupon

The Effects Of Aids On South African Sport :: essays research papers

Mr President, Mrs Hummel, Mrs Green, Ladies and Gentlemen By 2010 one in every two 15 year old South Africans will be HIV positive†¦ An alarming fact, which will have devastating impacts on all aspects of South African life. The statistics for HIV in SA, no matter how they are presented are frightening. Currently in SA 4,2 Million people are HIV positive, that is a tenth of our population, more than any other country in the world. As AIDS is a very contentious issue at the moment in our country. I am sure you have all heard plenty on the topic of AIDS. So I am focusing my speech this evening on a different aspect on AIDS, but one that is very important, that of the effects of AIDS on Sport in South Africa, now and in the future We are a country very passionate about sport, and AIDS will greatly effect our sport, and will raise many a question, such as, What are the risks of blood-to-blood contraction? Are our Sporting first aid facilities adequate? And what actions have and will be taken by Sporting governing bodies such as SARFU? 2000 was a bad year for sport in SA in general, The Hansie Cronje scandal, a failed world cup soccer bid, disappointing Springbok performances, the sacking of Nick Mallet and to cap it all off, A Gold-less Sydney Olympic Games. Can you imagine in 10 years time, when only half our 15 year olds can play sport†¦ imagine a half strength springbok team taking on the might of an all black side, or a half strength cricket team, battling it out at the world cup, with the likes of Australia. At the moment SA is one of the superpowers of African and World sport, containing many key components to ensure lasting successes on the sports fields of the world. Our population is large and diverse enough to ensure large numbers of elite sportsmen and women proceed through the ranks, to superstar status. Our wonderful climate allows for all-year round participation. All these ingredients have allowed SA to achieve sporting excellence, and the potential for even greater things is huge. Yet the threat posed by AIDS is a formidable obstacle in the development of SA sport and will surely hinder the progress. It is estimated that by 2010, the life expectancy of South Africans will have dropped to a mere 40 years. This not only means less doctors, lawyers and teachers, but also a decline in sportsmen and women, sports psychologists, nutritionists and administrators.

Vikram Seth

Vikram Seth Vikram Seth is a famous Indian poet, novelist, travel writer, librettist, children’s writer, biographer and memoirist. He was born on June 20, 1952 in Calcutta, now known as Kolkata. His father, Prem Seth, was an employee of the Bata India Limited shoe company. His mother was the first woman judge of the Delhi High Court, as well as the first woman to become Chief Justice of a state High Court, known as Shimla High Court. His childhood was spent in the town of Batanagar near Calcutta, Patna, and London. He has a younger brother, Shantum, and a younger sister, Aradhana. Seth admits that some of the fictional characters in his novels are â€Å"drawn from real life,† in comparison to his parents and siblings. Although discreet at times, he is not secretive about his personal life. He admits that the â€Å"I† in many of his poems is in reference to himself. His poems are addressed to both male and female objects. â€Å"Some men like Jack and some like Jill†¦What is my status? Stray? Or Great? are quotes taken from the poem Dubious, which shows him being open about his sexuality. He attended The Doon School in Dehadrun, where he admits to his â€Å"terrible feeling of loneliness and isolation,† during his studies. He also attended Oxford University, where he took his undergraduate degree in philosophy, politics, and economics. He was enrolled at Stanford University, as well as Nanjing University for his intended doctoral dissertation on Chinese population plann ing. â€Å"The Golden Gate† (1986), was his first novel. He has written a travelogue â€Å"From Heaven Lake: Travels Through Sinkiang and Tibet† (1983). His works in poetry include All You Who Sleep Tonight (1990). He has also written a story book for children Beastly Tales from Here and There (1992). His acclaimed epic of Indian life, A Suitable Boy (1993), won the WH Smith Literary Award and the Commonwealth Writers Prize (Overall Winner, Best Book). A Suitable Boy is the story of several Indian families-the Kapoors, Mehras, Chatterjis and Khans, whose paths intersect continually over a period of about a year. It never strays far from the subject of love and marriage–indeed, the book both begins and ends with weddings. Set in India in the early 1950s , which has only recently gained its independence from the British. A young girl by the name of Lata Mehra is the second daughter in her family. Her widowed mother, Rupa Mehra, is determined to find a â€Å"suitable boy† for her daughter. The book opens at Savita, Lata’s elder sister, and Pran Kapoor's wedding, where Lata decides that she does not want an arranged marriage like her sister. As the year passes three suitors come into Lata's life. Of the three, a handsome Muslim classmate and the self-made business man her mother wants for her. Lata is a rebellious kind of girl who is already in love with a Muslim boy. The novel shows a conflict between Hindus and Muslims in the fictional city of Brahmpur, where the story is primarily set. One of the main aims of the novel is to infuse the spirit of religious tolerance among the Hindus and Muslims. Family drama and Indian history unfold around her: Savita and Pran begin domestic life together and start their family. Life changes for Maan, Pran's brother, when he falls for a girl from an unsuitable family. The story also surrounds a fight that Lata’s brother has in Calcutta. The story delves into the normal and day to day routine life activities of India in 1951-52. Seth creates a compelling tale revolving around these four families and their love, hatred, sadness, daily chores, and lives in the times of a crisis. It shows a society that is a mix of different cultures, communities, and castes undergoing a change. Vikram Seth Vikram Seth Vikram Seth is a famous Indian poet, novelist, travel writer, librettist, children’s writer, biographer and memoirist. He was born on June 20, 1952 in Calcutta, now known as Kolkata. His father, Prem Seth, was an employee of the Bata India Limited shoe company. His mother was the first woman judge of the Delhi High Court, as well as the first woman to become Chief Justice of a state High Court, known as Shimla High Court. His childhood was spent in the town of Batanagar near Calcutta, Patna, and London. He has a younger brother, Shantum, and a younger sister, Aradhana. Seth admits that some of the fictional characters in his novels are â€Å"drawn from real life,† in comparison to his parents and siblings. Although discreet at times, he is not secretive about his personal life. He admits that the â€Å"I† in many of his poems is in reference to himself. His poems are addressed to both male and female objects. â€Å"Some men like Jack and some like Jill†¦What is my status? Stray? Or Great? are quotes taken from the poem Dubious, which shows him being open about his sexuality. He attended The Doon School in Dehadrun, where he admits to his â€Å"terrible feeling of loneliness and isolation,† during his studies. He also attended Oxford University, where he took his undergraduate degree in philosophy, politics, and economics. He was enrolled at Stanford University, as well as Nanjing University for his intended doctoral dissertation on Chinese population plann ing. â€Å"The Golden Gate† (1986), was his first novel. He has written a travelogue â€Å"From Heaven Lake: Travels Through Sinkiang and Tibet† (1983). His works in poetry include All You Who Sleep Tonight (1990). He has also written a story book for children Beastly Tales from Here and There (1992). His acclaimed epic of Indian life, A Suitable Boy (1993), won the WH Smith Literary Award and the Commonwealth Writers Prize (Overall Winner, Best Book). A Suitable Boy is the story of several Indian families-the Kapoors, Mehras, Chatterjis and Khans, whose paths intersect continually over a period of about a year. It never strays far from the subject of love and marriage–indeed, the book both begins and ends with weddings. Set in India in the early 1950s , which has only recently gained its independence from the British. A young girl by the name of Lata Mehra is the second daughter in her family. Her widowed mother, Rupa Mehra, is determined to find a â€Å"suitable boy† for her daughter. The book opens at Savita, Lata’s elder sister, and Pran Kapoor's wedding, where Lata decides that she does not want an arranged marriage like her sister. As the year passes three suitors come into Lata's life. Of the three, a handsome Muslim classmate and the self-made business man her mother wants for her. Lata is a rebellious kind of girl who is already in love with a Muslim boy. The novel shows a conflict between Hindus and Muslims in the fictional city of Brahmpur, where the story is primarily set. One of the main aims of the novel is to infuse the spirit of religious tolerance among the Hindus and Muslims. Family drama and Indian history unfold around her: Savita and Pran begin domestic life together and start their family. Life changes for Maan, Pran's brother, when he falls for a girl from an unsuitable family. The story also surrounds a fight that Lata’s brother has in Calcutta. The story delves into the normal and day to day routine life activities of India in 1951-52. Seth creates a compelling tale revolving around these four families and their love, hatred, sadness, daily chores, and lives in the times of a crisis. It shows a society that is a mix of different cultures, communities, and castes undergoing a change.

Country of origin, consumers Perception and Brand Image

Country of origin, consumer s Perception and Brand Image Introduction The impact of country of origin (COO) on the consumer s perception of products has been one of the most widely studied areas of international marketing. Increasing globalization of today s business has resulted in unprecedented problems for manufacturers, marketers, and consumers (L. Y. Lin Chen, 2006). The country of origin (where a product is made) touches both consumer evaluations of the product as well as the firm s decision to manufacture its goods in certain countries and how to brand (Parkvithee Miranda, 2012). Country-of-origin or in other words the Made in is a concept which states that people constitutes attitudes and believes shaping the†¦show more content†¦Consumers tend to recall the stored information about the brand and the country in question and then they relate the brand name with the COO to form a brand image and infer the product evaluation (Scott and Keith, 2005; Koubaa, 2008, p.141). Brand image is the reasoned or emotional perceptions consumers attach to a specific brand. It consists of functional and symbolic brand beliefs (Dobni and Zinkhan, 1990; Koubaa, 2008, p.141). Brand image is made up of brand associations. ‘‘Brand associations are the category of brand’s assets and liabilities that include anything ‘‘linked’’ in memory to a brand’’ (Aaker, 1991; Koubaa, 2008, p.141). â€Å"The ‘essence’ of the brand is a single simple value, easily understood and valued by consumer† (Arnold, 1992, p. 17; Pappu, Quester and Cooksey 2006, p.697).When brands are competing in the international arena, marketing managers should understand how to maintain the core essence of their brand across international boundaries. Examining how country of origin impacts brand image and its associated dimensions (e.g. perceived quality, brand associations) should reveal the means to protect or enhance the core essence of a brand. The country of origin of a product is an important marketing element known to influence consumer perceptions as well as behavior. Conversely, an inferior country of origin could tarnish a brand name (Thakor and Katsanis, 1997; Pappu, Quester and Cooksey, 2006, p.697).Show MoreRelatedUnderstanding the Relation between Country Image and Consumer Brand Equity868 Words   |  4 PagesUnderstanding the relation between country image and consumer brand equity is very important for many reasons, first the spread of globalization and the increase of international businesses which facilitate the transfer of the products from one country to consumers in other countries. Second, firms in developed countries start to shift the production lines to other countries to benefit from the cheap labor and low transportation cost. Finally firms sell their products in other countries for strategic reasonsRead MoreGlobal Brand and Local Brand1446 Words   |  6 Pagesï » ¿Global brands Vs. 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