http://www.youtube.com/watch?v=t_LWQQrpSc4
Inflation & balance of payments
Inflation rates
Thailand 3.4%UK 3.1%Malaysia 2%Cambodia 18.7%Indonesia
Inflation
Low Inflation
InflationThailand’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 rise in prices measured against a standard level of purchasing power.
Inflation is measured by comparing two sets of goods at two points in time
Related concepts include: Deflation - a general falling level of pricesDisinflation - the reduction of the rate of inflationHyper-inflation - an out-of-control inflationary spiralStagflation - a combination of inflation and poor economic growthReflation - An attempt to raise prices to counteract deflationary pressures.
Nurses case study1 – cut down2 – fold in half3 – 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 growthThailand’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
ExportsImports
฿20 ฿10
Deficit = ฿10฿80
฿120
Surplus = ฿40
Balance of paymentsThailand $3bn surplus (2001)
UK $25bn deficit
India $1.1bn surplus
America
Cambodia
Malaysia
Indonesia
Homework7 (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 interventionMost countries have a mixed market economy. The government will have some influence on the performance of the economy.
Fiscal policy Monetary policy
Spending & taxation
Interest rates
2 minute discussion
End
1.1 Starting a Business Enterprise
Discuss with the person next to you, what effect your ‘card’ would have on the economy.
The economic cycle
Increase in GDP
Increase in
inflation
Monetary policy
Economy slows down
Decrease in GDP
Fiscal policy
Economic cycleNow complete the economic cycle, using these boxes to help you.
Increase in GDP
Decrease in GDP
Unemployment at
its highest
Increase interest
rates
Increase unemployment
People spend
less
Increase public
spending
Increase in
inflation
Business make
less sales
Business reluctant
to 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