Question

there has been a very high rate of І самое 11. Many governments are concerned about inflation in their economies." example, a particular problem in Country A where there has been a very put inflation in their economies. This was, for inflation. (a) What is meant by inflation? (b) Describe how a retail (consumer) price index is calculated. (©) Explain what is meant by demand-pull inflation. (d) Discuss whether a government should be concerned about a high rate of inflation its economy. 12. The living standards of people vary enormously and yet it is not always easy to measure these with great accuracy. It is, however, certainly the case that some countries suffer from extreme poverty. (a) Describe how living standards in a country can be measured. (b) Explain two reasons why the measurement of living standards in a country is not always accurate. (c) Discuss the actions a government might take to reduce poverty.

Answer 1

@ Inflation is a quantitative measure of the rate at which the average perice lind of a basket of selected goods and services in an economy increases over a period of time. often expressed as a percentage , Inflation. indicates a decrease in the purchasing Power of a nation's currency .. nara HATITA 6 It is determined calculated by taking Price Changes for each item in the predetermined basket of goods and averaging them. Changes in the cat are used to assess Price Changes associated with the cost of liung. The col is one of the most frequently used statistics for identifying Periods of Inflation or deflation. @ on when demand cuspasses & Supply highes pries are the result. This is demand -pull inflation causes of demand pull inflation Agrowing economy & when consumer tell confident, they spend more and take on more debt. This reacts to a steady increase in demand, which mean higher price more money in the system &- An expansion. of the money supply auth too few gooces to buy makes price increase & Government spending on when the govement spends more freely, Price go up. plation expectation of companies may increase their prices in expectation of inflation in the near future.

@ Goverment is alway concerned about high rate, of anflation. High Rate Inflation puts pressure on a goverment to increase the value of the State pension and unemployment benefit and other welfare payments as the cost of lining climbs nighes. C enflation expectations and wage demands This can lead to rise in unit labour costs and lower profit for business. Goverment know the thigh Rate griflation like - Impact of cost of living 2 cost of doing business Borrowing money o n mortgages the. oon va impact a Standard of lining is the amount of goodes. and services available to purchase in a country. Real GDP per capita and Gross National income per capita are the two mest common ways to measure the standard of living GOP measures all transactions within a country's boundary, while an include those who lived abroad. standard of living only measure the wealth of material thing its citizen. have, but not quality of life.

(6) In my opinion Standard of lining is measured on all aspects of life. But are measure the Standard of lining by GoP & Cronel of per capita. But these two can't include. - unpaid work (volunteer Activities) 2 Doesn't measure the pollution, safety. and health song (3) GDP per capita measurement assumes that production, and its reward non are divided & qually among ешич сті. ЭЕ 2 олоо л о то inequality. enios I think aboue all also include to find accurate standard of living. © - By Proper Public Distribution System. 8 rural income effective way of raising and to ensure Food Security to the Poor households the goverment Should world an an assured supply it of adequate quantity of food grain. By giving access to credit credit availability for the poor and ondes privéledge on easy termes can better create living conditions. Small farmers can gain access to dynamic resources such as betth seeds, fertilizes.

③ By accelerating the growth of non- farm. employment. Rural areas are of Special importance for the reduction of poverty and growth of non farm employment oppurtunities. This types of employment can be created in sales, marketing, transportation handicraft, dowry Farming etc.