China May consumer inflation cooler than expected but producer prices perk up

 

 

http://www.straitstimes.com/business/economy/china-may-consumer-inflation-cooler-than-expected-but-producer-prices-perk-up

The article reports the low rates of CPI Inflation against the forecasted figures compared to increasing rates of PPI (producers Price Index) Inflation. The low rate of increase in prices has been attributed to sluggish demand and thus lesser than expected Consumption and the existing overcapacity (Surplus) in production. Taking cues from the lower Inflation figures, the Chinese Government will continue to pursue Expansionary Monetary and Fiscal policy to stimulate Aggregate Demand and Economic Growth in China.

 

Topics include Inflation, Disinflation, relationship between Interest rates and Inflation, Expansionary Fiscal and Monetary Policies. Explain using the National output diagrams and discuss the combined effect of Expansionary Demand side and Supply side policies on Price and National Income (Economic Growth).

 

Evaluation will cover effectiveness of Expansionary Fiscal and Monetary policy to tackle Recession, Government Intervention to tackle Inflation, Unemployment, impact on the Consumers, Producers and Society in short term and long term.

 

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