Economics

Inflation targeting is a monetary policy regime adopted by the central bank where the bank estimates a target or projected inflation rate and makes public it target rate. Where inflation targeting regime is adopted the central bank attempt to steer inflation toward the targeted rate. The interest rate is the main monetary policy tool used to control inflation rate in order to achieve a targeted rate. Due to the inverse relationship between interest rate and inflation rate the move by the central...

The Producer Price Index, also known as the Wholesale Price Index until 1978, is considered to be a chief indicator of a countrys economy. It is the weighted index of prices at the wholesale, or the producer level.  In other words, it measures the change in the selling prices for the output produced by the local producers only.  Hence, it shows the movement of the wholesale prices relative to a base period (BLS, 2009). For example The UK PPI measures the movement of the goods and services...

New Trade Theory (NTT) International free trade ensures increasing returns and this leads to better business benefits. From the perspective of achieving better business and trade NTT is indispensible for the nations. For internationally presenting a product it is mandatory to remain adherent to the standards. So, until a product is internationally accepted, the nations should shelter it. So, it can be said that the New Trade Theory explains that a product which can complete internationally should...

1. Given A country has a Current Account Surplus of 10 billion, a Financial Account Deficit of 6 billion and a balanced current account. To Determine If the country runs a balance of payments deficit or surplus Balance of payments (BOP) measures the net current account (CA), capital account and financial account balances. Current account balance   10 billion ( indicates a surplus), financial account balance  - 6 billion (- indicates a deficit) and capital account balance  0. BOP  Current...

International business model entails trading between countries or business organizations on an international platform. Under this mode of business, services, capital, and goods are exchanged across international territories or boundaries. There are both positive and negative effects which international trade has on the economy of the United States of America (McKenzie 1994, pp. 12-192). The fiscal and the monetary policies which are always put into place always affect the countrys exchange rates...

In order to determine whether a low cost low price policy is good for an economy, it is essential to establish what factors are beneficial to the economy. These factors include individual and social well-being, greater employment, healthcare and wage benefits and lesser poverty. Based on these factors, a low cost low price policy is not good for the economy.     When firms opt for low cost pricing at the cost of worker wages and benefits, employee well-being is lowered. For instance,...

Economic Conditions of Brazil and Zimbabwe Brazil is a country in the South American region characterized by one of the strongest growth rates not only in that region, but worldwide. Its economy is sustained by agriculture and the energy sector. Apart from this, it is blessed with a plethora of natural resources ranging from minerals to petroleum. This, in recent times, has helped it grow out of the effects of inflation experienced in the early to mid nineties. The effects of the inflation were...