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Title: Impacts Of Inflation

Essay Details

Subject: Business
Date: March 25, 2015
Level: University
Grade: A
Length: 3 / 722
No of views: 0
Essay rating: good 0, average 0, bad 0 (total score: 0)

Essay text:

These changes in financial markets affect consumer and business demand and in turn output. Changes in demand and output then impact on the labour market - employment levels and wage costs - which in turn influence producer and consumer prices. When interest rates are changed, demand can be affected in various ways: It can affect spending and saving decisions...

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At higher interest rates, clients have less money to spend, due to the increased cost of borrowing. (Most people have loans, which they have to service every month, so if rates rise, monthly instalments increase and there is less money available for other things.) Spending by consumers in the shops and spending by firms on new equipment will therefore decrease...

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